Saudi Arabia’s PIF to anchor US$2 billion Brookfield Mideast fund
Half of the fund will be invested in Saudi Arabia itself
SAUDI Arabia will back Brookfield Asset Management’s new US$2 billion Middle East fund, giving the Canadian investment firm extra financial firepower to pursue deals in the oil-rich Gulf region.
Half of the fund will be invested in Saudi Arabia itself, according to a document seen by Bloomberg News. The deal, set to be announced at Saudi Arabia’s annual investors confab known as the Future Investment Initiative, strengthens ties between Brookfield and the kingdom’s wealth fund, which manage about US$1 trillion in assets each.
The partnership marks the latest example of a foreign firm raising a Middle East-focused funds. Goldman Sachs Group is working on one and has hired a longtime JPMorgan Chase banker to run it, Bloomberg News has reported.
The Public Investment Fund is Saudi Arabia’s go-to vehicle to carry out the ambitious domestic reform agenda of the country’s crown prince Mohammed Salman. It has been a prolific investor in recent years across the globe, although its focus has recently shifted to domestic markets where it’s the driving force behind mega-projects such as the US$1.5 trillion Neom city development.
Last year, Brookfield said it would open an office in Riyadh, the latest international firm to set up shop in the kingdom. It’s already one of the Middle East’s most active and largest institutional investors with about US$12 billion invested in recent years, mostly in the United Arab Emirates.
Until now, those investments were done through its global funds. The firm’s recent regional deals include investments in a major private school operator and a regional payments firm. It also sold a stake in the tallest office tower in Dubai’s financial district earlier this year.
Brookfield’s new Middle East vehicle aims to invest in private equity deals and real estate. Other anchor investors and its first close are expected to be announced in the coming months.
Other international asset managers are also seeking to raise dedicated funds for the region. BlackRock is seeking US$1 billion for a new Middle East infrastructure and private equity-focused fund with some of the region’s largest sovereign wealth funds, Bloomberg News reported in May. BLOOMBERG
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