Whether Saudi’s fund-disclosure push draws capital comes down to how proportionately it’s applied

The Capital Market Authority’s (CMA) push for asset-level disclosure should deepen the private funds market, but only if smaller managers can keep up. Transparency should lower the risk premium investors demand and help local funds compete for foreign capital, First Financial Markets analyst Ahmad Chreim tells EnterpriseAM. The question is cost — whether the rules stay practical and proportionate to each fund’s size and complexity, Alkhair Capital assistant portfolio manager Fardeen Akhtar tells us.

The market that outgrew its disclosure

The CMA rolled out draft amendments requiring real estate, private equity, and venture funds to report holding by holding, the latest in a run of CMA moves since Mazen Al Sudairi took over as chairman, all pulling toward a market whose numbers investors can rely on and whose capital pools run deeper.

The timing tracks the growth: Private fund assets reached around SAR 756 bn across more than 1.8k funds in 2Q 2026, up about 30%, Argaam Investments business solutions manager Ahmed Ramzy said.

That expansion is what the rules are chasing. Ramzy sees no evidence of a valuation crisis, but unlisted assets with no market price still need more transparency. Chreim calls it “a market at a natural stage of maturation rather than one with a serious gap,” with the regulator standardizing disclosure so investors can compare funds like for like. The gaps that remain, Akhtar says, are widest in real estate and private equity, a pattern common to private markets globally — these assets lean on estimates, so a strong reported return doesn’t show how much came from realized gains and how much from unrealized ones. Private funds aren’t necessarily overvalued, he added; what’s missing is visibility into how the valuations are set.

What it changes for investors

Two private equity funds can post the same return, one having realized it through exits and the other holding it mostly on paper. Telling them apart is the point of the draft, Akhtar says, and it’s what today’s disclosure obscures. The amendments would put quarterly top holdings in front of investors, along with where distributions come from, whether income or asset sales, giving them what they need to judge performance and the risk behind it.

Seeing the holdings isn’t enough on its own, Ramzy adds. Investors also need the valuation method, whether discounted cashflow or multiples, and the assumptions behind it, since the reported value of an unlisted asset means little without the math that produced it.

The same logic runs through the conflict-of-interest rules. They aren’t new in Saudi Arabia, Ramzy says, but the draft expands them from the bare fact of a conflict to its nature, the parties involved, its potential impact, and the manager’s response. Even then, disclosure has a ceiling. “Disclosing a related-party transaction doesn’t tell investors whether it was fairly priced,” Akhtar cautions. “That’s where proper oversight matters.” That is more important in a market where agreements are often negotiated directly and prices aren’t observable.

The cost, and who carries it

The burden falls hardest on the smallest managers. A firm running one or two funds lacks the compliance teams larger houses can lean on, Akhtar tells us, so staffing, valuation, and reporting costs could weigh on profitability relative to fund size — and thinning out smaller managers would cost the market the diversity it needs. His fix is proportionality — standardized templates, reasonable transition, periods and requirements scaled to each fund’s complexity, without lowering investor protection.

The harder-to-value corners are the other pressure point. In venture capital especially, thin financial histories make valuations subjective, Akhtar says, and stricter reporting could make managers wary of early-stage deals where information is limited or commercially sensitive; he wants consistent valuation standards that still leave room to explain uncertainty and shield what’s sensitive. Ramzy frames the same balance as structuring openness while protecting sensitive details — keeping portfolio companies’ information private while making value, performance, and risk legible, the gap he says has kept capital on the sidelines.

Chreim reads the same concern more calmly. The consultation is designed to surface exactly this, he says, and the draft pulls scattered disclosure obligations into a single section of the regulations, which should make compliance clearer. Strong disclosure can even work in smaller managers’ favor, he added: it “becomes a credibility signal when raising capital.”

Net positive, if the execution holds

Weigh it up, and the analysts expect a net gain, one that builds over the medium to long term. Transparency lowers the risk premium investors demand and helps Saudi funds compete for foreign capital as the market opens, Chreim says, and it matches the CMA’s other recent moves such as opening financing funds to public offering and simplifying fund structures, which raise standards and widen the market at once. PE and VC investors already expect rigorous valuation reporting, he adds, so clear, consistent practice tends to widen the investor base.

The catch is execution. Transparency is one draw among several, Ramzy said — alongside expected returns, exit opportunities, and manager quality — and while he sees no evidence that compliance costs will outweigh the benefits, that rests on how easily the rules can be implemented. Akhtar lands in the same place: larger managers can absorb the costs more comfortably, but “if [the requirements] are practical and proportionate to the size and complexity of funds, I think the benefits will outweigh the costs.”