Saudi Awwal Bank’s investment arm Sab Invest is looking to raise SAR 1 bn (USD 266 mn) for its first MENA-focused private credit fund, the company’s Chief Investment Officer Osama Alowedi told Bloomberg. The firm has already raised some USD 100 mn from regional wealth managers and family offices and plans to raise the remainder over the next year.

Where will the money go? The shariah-compliant fund will invest in debt financing instruments, including sukuk issued by SMEs, venture debt, and debt instruments for infrastructure projects. Sab Invest is targeting an annual yield of 10-11%, with 60% of the fund’s capital earmarked for domestic investments.

REMEMBER- Sab Invest has been actively diversifying its offerings this year, launching the Kingdom’s first quantitative ETF in May, which tracks the S&P Saudi Domestic Shariah Index. It also closed a USD 100 mn VC fund in partnership with Saudi Technology Ventures that same month.

What’s next? The firm is preparing to launch additional quant funds with varying risk profiles in the near future, Alowedi said.

The market is gaining momentum: The Public Investment Fund partnered with Goldman Sachs in March to anchor new regional private credit and public equity strategies. Hassana Investment Company also signed a USD 150 mn MoU with Franklin Templeton to explore further investments in the space.

DATA POINT- The private credit market in the GCC and Egypt is projected to grow at a 15-30% CAGR over the next 5-6 years, according to a PwC report.

Tags: