Saudi Arabia’s Vision 2030 driving private equity growth in the GCC

Private equity investments in Saudi Arabia have witnessed unprecedented growth over the past five years. Shutterstock
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Updated 21 February 2025
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Saudi Arabia’s Vision 2030 driving private equity growth in the GCC

RIYADH: Saudi Arabia has emerged as a transformative force in the private equity landscape within the Gulf Cooperation Council, driven by strategic initiatives, regulatory reforms and the nation’s commitment to Vision 2030.

The Kingdom’s ambitious plans are reshaping the region’s investment ecosystem, setting new benchmarks for growth, diversification and global engagement.

A surge in private equity activity

Private equity investments in Saudi Arabia have witnessed unprecedented growth over the past five years.

The total value of PE transactions surged from $523 million in 2019 to an all-time high of $4 billion in 2023 — seeing a compound annual growth rate of 66 percent during this period, according to a report by MAGNiTT and Saudi Venture Capital Co.

This surge highlighted the Kingdom’s success in creating a favorable environment for local and international investors.

Speaking to Arab News, Arjun Singh, partner and global head of fintech at Arthur D. Little, emphasized Saudi Arabia’s economic resilience amid global challenges: “While the world has grappled with rising prices due to inflation, Saudi Arabia has been able to maintain a relatively low inflation rate — 2.1 percent in 2024 and projected 2.3 percent in 2025 — which makes for a stable investment environment.” 

Head of Janus Henderson Investors for Middle East, Africa and Central Asia, Meshal Al-Faras, expanded on this resilience, attributing it to strong domestic liquidity anchored by the Public Investment Fund and family offices, as well as a low debt-to-GDP ratio that ensures continued counter-cyclical investment even during global economic downturns.

He also highlighted Vision 2030’s success in “reducing dependence on oil and fostering resilience to inflationary pressures.”

Key to this growth is the increasing dominance of buyout transactions, which have consistently accounted for about 80 percent of the total PE capital deployed in Saudi Arabia. 

Growth equity investments have also gained traction, reflecting the Kingdom’s strategy to support mid-sized companies poised for expansion.




Meshal Al-Faras, head of Janus Henderson Investors for Middle East, Africa and Central Asia. Supplied

Sectoral highlights

The manufacturing sector led the charge in PE investments, capturing 46 percent of the total value between 2019 and 2023. Other prominent sectors included financial services, telecommunications and health care.

Vision 2030 initiatives have encouraged diversification into non-oil sectors, with Singh identifying several opportunities: “While manufacturing and financial services dominate, greater activity is anticipated in food and beverage, tourism, entertainment, health care, technology, renewable energy and real estate.”

Leader of FTI Consulting Middle East and Africa, Vikas Papriwal, noted the opportunities emerging in health care and technology. “The Kingdom is fast becoming a regional tech hub. Advancements in fintech, cybersecurity and in particular AI (artificial intelligence) are supported by key government initiatives,” he said.

Papriwal said that partnerships with leading centers of excellence are positioning Saudi Arabia as a leader in cutting-edge health care and medical research.

Al-Faras echoed these observations, pointing to technology as a key area: “Government initiatives like SDAIA (Saudi Authority for Data and Artificial Intelligence) and fintech success stories such as STC Pay highlight opportunities in AI, fintech and cloud computing.” 

He also emphasized the Kingdom’s ambitions in tourism and entertainment: “Giga-projects like NEOM and the Red Sea Development aim to attract 100 million annual visitors by 2030, driving investments in hospitality and eco-tourism.” 

Additionally, he highlighted logistics and supply chain opportunities due to Saudi Arabia’s strategic location as a global trade hub.

The top five PE transactions accounted for 76 percent of the total investment during the period between 2019 and 2023, underscoring the concentration of capital in high-value deals.

Driving forces behind the transformation

Saudi Arabia’s transformation into a PE powerhouse is deeply rooted in its economic and regulatory reforms. Vision 2030 has been instrumental in fostering a robust investment ecosystem.

Papriwal highlighted the impact of regulatory enhancements: “The recent updates to Companies Law have made conducting business in Saudi Arabia significantly easier for investors as it improves legal certainty and transparency.”

Al-Faras elaborated on this: “The introduction of new laws such as the New Companies Law, effective January 2023, have transformed Saudi Arabia’s business landscape.”

He added: “They have streamlined corporate structures, for example, the introduction of the Simplified Joint Stock Co. allows flexibility and ease for startups and investors, requiring no minimum capital. They have also improved governance, with enhanced minority shareholder protections and formal recognition of shareholder agreements boosting investor trust.”

The top official explained that the regulations enable full foreign ownership, which enables access to previously restricted sectors such as retail and manufacturing, and encourages international investment. 

“Moreover, they provide support for SMEs and Innovation in that provisions like audit exemptions and employee share schemes reduce costs and foster entrepreneurship,” he added.

Additionally, Singh pointed to Saudi Arabia’s improving global rankings: “KSA has steadily been rising in the ‘Ease of doing business’ ranking … and has also gone up the ranks in the Global Innovation Index ranking from 66th in 2020 to 48th in 2023; the GII ranks the world economies according to their innovation capabilities.”




Arjun Singh, partner and global head of fintech at Arthur D. Little. Supplied

The role of the Public Investment Fund

PIF has played a central role in driving private equity growth. Papriwal described it as a catalyst for fulfilling Vision 2030 objectives: “It is at the fulcrum of many government initiatives driving public and private sector growth and employment.”

He added: “PIF has successfully created a number of significant industry platforms allowing cutting-edge technologies to be embedded into these key growth engines.” 

Al-Faras highlighted the wealth fund’s pivotal role in de-risking investments: “By acting as an anchor investor, the PIF reduces risks for private and institutional investors. Its investments in technology, renewable energy and tourism projects like NEOM have positioned Saudi Arabia as a hub for innovation.” 

He added that PIF’s strategic approach balances domestic development with global diversification, demonstrating how sovereign wealth funds can align investments with national priorities to drive long-term growth.

Comparative advantage in the GCC

While global PE markets grapple with high interest rates and inflation, the GCC region, led by Saudi Arabia, remains resilient.

Saudi Arabia’s PE ecosystem benefits from its particular investor composition, where family offices and sovereign wealth funds dominate compared to institutional investors in Western markets.

Papriwal said: “Saudi private equity investors are also less dependent on global capital markets compared to their counterparts in other regions, which allows for a degree of insulation from international interest rate fluctuations.”

Al-Faras added: “Expanding IPO activity, and the privatization of state-owned assets create liquidity and exit opportunities.”

To attract more international general partners, Singh suggested building trust through greater transparency and aligning regulatory frameworks with global standards. 

Local players must focus on protecting intellectual property rights, streamlining dispute resolution and improving ease of doing business through financial incentives, he advised.

Al-Faras concurred, stating: “Another recommendation is to simplify market access: Expand 100 percent foreign ownership to additional industries and digitize business processes.”

Venture capital synergy

Complementing the PE landscape is Saudi Arabia’s thriving venture capital ecosystem. 

Venture funding in the Kingdom grew nearly 15-fold between 2018 and 2023, reaching $6.1 billion.

Programs such as the Neom Investment Fund and Aramco Ventures are catalyzing innovation, particularly in technology-driven sectors.

Papriwal said that encouraging partnerships between local firms and international general partners will ease navigation across the business landscape and accelerate investments.

Future outlook

As Saudi Arabia continues to reshape the PE landscape, several trends are expected to define its trajectory,

Increased deal flow, with ongoing economic diversification and infrastructure development will sustain growth in PE transactions.

Alongside that, sectoral expansion will occur, with health care, technology and logistics likely to attract increased investment, leveraging the Kingdom’s young, tech-savvy population and strategic geographical location.

Enhanced exit opportunities are also set to help foster a rise in IPOs, and strategic mergers and acquisitions, while secondary market activity will provide more avenues for PE firms to realize returns.

Papriwal summarized the Kingdom’s trajectory, explaining that Saudi Arabia’s proactive strategies “create a wider appeal to private equity investors who will give the Kingdom access to global capital.”

He added: “The resulting inflow of international capital, expertise and technology will have a profound and long-lasting impact on Saudi Arabia’s economic development, positioning the Kingdom as a major global business hub in the years ahead.” 


Saudi Aramco lowers July oil prices for Asian markets

Updated 04 June 2025
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Saudi Aramco lowers July oil prices for Asian markets

RIYADH: Saudi Aramco has slashed its official selling price for crude oil destined for Asia in July, the company confirmed in an official statement on Wednesday.

The state-owned oil giant cut the price of its benchmark Arab Light crude by $0.20, setting it at $1.20 per barrel above the average of Oman and Dubai crude prices.

Saudi Aramco prices its crude oil across five density-based grades: Super Light (greater than 40), Arab Extra Light (36-40), Arab Light (32-36), Arab Medium (29-32), and Arab Heavy (below 29).

The company’s monthly pricing decisions impact the cost of around 9 million barrels per day of crude exported to Asia and serve as a pricing benchmark for other major regional producers, including Iran, Kuwait, and Iraq.

In the North American market, Aramco set the July OSP for Arab Light at $3.50 per barrel above the Argus Sour Crude Index.

Aramco determines its OSPs based on market feedback from refiners and an evaluation of crude oil value changes over the past month, taking into account yields and product prices.

Plans by OPEC+ producers to increase output by 411,000 barrels per day in July are also weighing on the market.

Yet, there was some support as wildfires reduced Canada’s production by some 344,000 bpd, according to Reuters calculations.

 


PIF-backed Lucid inks graphite supply deal to bolster US EV battery material sourcing

Updated 04 June 2025
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PIF-backed Lucid inks graphite supply deal to bolster US EV battery material sourcing

RIYADH: Lucid Group, the electric vehicle manufacturer backed by Saudi Arabia’s Public Investment Fund, has signed a multiyear supply agreement with Graphite One to source natural graphite from the US.

The move is aimed at reinforcing the company’s domestic supply chain for battery production. The agreement aligns with Lucid’s broader strategy to secure critical raw materials domestically.

It follows similar deals with Graphite One and Syrah Resources as the company ramps up efforts to localize its EV production ecosystem.

According to the terms, the graphite will be supplied through Lucid’s battery cell partners for use in upcoming vehicle models.

Lucid is majority-owned by PIF, which holds a 60 percent stake, amounting to 1.77 billion shares. The partnership underscores the sovereign fund’s long-term commitment to advancing electric mobility as part of Saudi Arabia’s Vision 2030.

In September 2023, Lucid opened its first international manufacturing facility in King Abdullah Economic City. The plant currently produces 5,000 vehicles per year, with plans to scale up to 155,000 units annually. The expansion is expected to support Saudi Arabia’s ambitions to diversify its economy and become a regional hub for electric vehicle manufacturing.

“A supply chain of critical materials within the United States drives our nation’s economy, increases our independence against outside factors or market dynamics, and supports our efforts to reduce the carbon footprint of our vehicles,” said Marc Winterhoff, interim CEO at Lucid.

Under the latest deal, Lucid and its battery suppliers will begin receiving natural graphite from Graphite Creek, a deposit located near Nome, Alaska, starting in 2028. This builds on a prior agreement signed in 2024, in which Graphite One will provide synthetic graphite from its proposed anode materials facility in Warren, Ohio — also set to begin production in 2028.

“This agreement complements the deal we struck with Lucid in 2024 — which marked the first synthetic graphite agreement between a US graphite developer and a US EV company,” said Anthony Huston, CEO of Graphite One.

He added: “We made history then — and we’re continuing to make history now as we build momentum for our efforts to develop a fully domestic graphite supply chain, to meet market demands and strengthen US industry and national defense.”

Lucid is also expected to receive natural graphite active anode material from Syrah Resources starting in 2026, as part of its ongoing diversification of supply sources.

In a further boost to its financial position, Lucid closed a $1.1 billion offering of convertible senior notes in April, due in 2030. The announcement came shortly after the company reported first-quarter deliveries of 3,109 vehicles — a 58 percent increase year on year.


Closing Bell: Saudi main index closes in green before Eid holidays 

Updated 04 June 2025
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Closing Bell: Saudi main index closes in green before Eid holidays 

RIYADH: Saudi Arabia’s Tadawul All Share Index climbed on Wednesday, gaining 172.1 points, or 1.59 percent, to close at 11,004.53. 

The total trading turnover on the benchmark index was SR4.61 billion ($1.23 billion), with 191 listed stocks advancing and 50 declining.

The Kingdom’s parallel market Nomu surged by 257.9 points to close at 27,307.74. 

Meanwhile, the MSCI Tadawul Index edged up by 1.67 percent to 1,406.49.  

The best-performing stock on the main market was Saudi Industrial Investment Group, with its share price surging 7.03 percent to SR17.36. 

The share price of ACWA Power Co. also rose by 6.72 percent to SR269.80.  

Al-Babtain Power and Telecommunication Co. saw its stock price increase by 5.40 percent to SR5.40. 

Conversely, the share price of Saudi Steel Pipe Co. fell by 6.33 percent to SR56.20. 

Saudi Research and Media Group also saw a dip, with its share price easing 2.26 percent to SR127. 

On the announcements front, Saudi National Bank completed its offer of Saudi riyal-denominated Additional Tier 1 sukuk, with the settlement finalized on June 3. 

According to a statement on the Saudi Exchange dated May 11, the issuance was conducted through a private offer to eligible investors in the Kingdom. The total value of the sukuk offering amounted to SR1.73 billion. 

The bank issued 1,730 sukuk, each with a par value of SR1 million. The sukuk will offer an annual return of 6 percent from the issue date until June 3, 2030. 

The share price of Saudi National Bank increased by 0.88 percent to close at SR34.45. 

The announcement coincided with the implementation of the unified regulation for cross-border registration of investment funds among Gulf Cooperation Council countries, which came into effect in 2025, according to the Capital Market Authority. 

The regulation outlines requirements for registering and marketing investment funds across GCC countries and introduces a dedicated regulatory guide. 

It aims to clarify procedures for handling both local and Gulf-based funds, enhance financial market services, and reduce regulatory challenges. 

Additionally, the framework seeks to support mechanisms that attract international investments to the Saudi financial market and boost foreign ownership in investment funds. 

The broader goal is to improve liquidity in regional financial markets, enhance the competitiveness of GCC economies, and foster integration by unifying the policies and systems governing domestic, regional, and foreign investment activities. 

The regulation also aims to ensure a transparent and stable investment environment. 

Under the framework, the legislative committee in each host country will have the authority to set standards for approving fund registrations and supervising funds within its jurisdiction, including overseeing the appointed agent and their interactions with investors. 

Cross-border registration must be conducted through the capital market authorities of both the fund’s country of origin and the host country. 

The regulation allows investment funds established in any GCC member state to be promoted in other countries applying the framework. 

It also outlines the process for offering Saudi funds in Gulf markets, with a focus on aligning with regulatory review mechanisms and cross-border registration requirements to ensure full compliance with approved guidelines. 


Saudi POS spending hits $4bn pre-Adha, fueled by increased spending across all sectors 

Updated 04 June 2025
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Saudi POS spending hits $4bn pre-Adha, fueled by increased spending across all sectors 

RIYADH: Saudi Arabia’s point-of-sale transactions climbed 33 percent to SR15.5 billion ($4.15 billion) in the week preceding Eid Al-Adha, driven by increased spending across all sectors. 

The latest data from the Saudi Central Bank, also known as SAMA, showed that the clothing and footwear sector led the growth seen in the week ending May 31, registering the largest jump in transaction value, up 72.7 percent to SR1.2 billion. 

The sector also saw a 61.6 percent rise in the number of transactions, reaching 8.6 million. 

The education sector followed, recording a 61.6 percent increase in transaction value to SR242.1 million. Telecommunication spending ranked next, rising 44.5 percent to SR136.2 million, with transactions up 19.9 percent to 2.1 million. 

Food and beverages — the sector with the biggest share of total POS value — recorded a 34.2 percent increase to SR2.2 billion. 

Transportation spending rose 29.7 percent to SR898.8 million, while restaurants and cafes saw a 24.3 percent increase, totaling SR2 billion and claiming the second-biggest share of this week’s POS. 

The smallest spending gains were in hotels, rising by 9 percent to SR207.5 million, and construction and building materials, which increased by 12.9 percent to SR267.6 million. 

Health outlays rose by 28.4 percent to reach SR952.8 million, while the public utilities sector increased by 29.1 percent to SR55.3 million. 

Spending on electronics followed the trend, rising 23.1 percent to SR187.2 million, and recreation and culture edged up 42.5 percent to SR324.3 million. 

Miscellaneous goods and services claimed the third-largest share of total transactions value, with an uptick of 34.4 percent to SR1.9 billion. 

The top three categories — food and beverages, miscellaneous goods and services, and clothing and footwear — accounted for 39.9 percent of the week’s total spending, amounting to SR6.2 billion. 

Geographically, Riyadh dominated POS transaction value, with expenses in the capital reaching SR5.4 billion, a 42.7 percent increase from the previous week. 

Jeddah followed with a 27.7 percent rise to SR2.1 billion, while Dammam ranked third, up 25.1 percent to SR776.5 million. 

Hail saw the biggest weekly increase in transaction value, inching up 52.6 percent to SR262.6 million, followed by Tabuk with a 51.3 percent uptick to SR323.6 million. 

Hail recorded 4.3 million deals in transaction volume, up 24.7 percent, while Tabuk reached 5.2 million transactions, rising 21.1 percent. 


Hong Kong-based Gaw Capital plans to step up Middle East investments

Updated 04 June 2025
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Hong Kong-based Gaw Capital plans to step up Middle East investments

  • Gaw Capital targets UAE, Saudi Arabia for investments
  • Firm plans separate investment vehicle for Middle East

HONG KONG: Gaw Capital plans to bolster investments in the Middle East, its top executive said, as the Hong Kong-based multi-asset investment manager looks to tap into the post-COVID boom in the region’s real estate and other industrial sectors.

Christina Gaw, Gaw’s managing principal and global head of capital markets, said the firm is looking at real estate and other businesses in the UAE and Saudi Arabia as their population has a large demand for real assets.

Gaw acquired a residential building in Abu Dhabi in May for more than $150 million, and signed a pact in November with Expo City Dubai and Lingang Group to explore creating the Expo Life Science Park in Dubai.

The firm, which had $34.4 billion of assets under management as of the end of 2024, expects to close another deal in the region in the second half of the year, said Gaw, whose two elder brothers founded the company in 2005.

Gaw’s interest in the Middle East comes against the backdrop of a post-pandemic property boom there, fueled by business demand and foreign investment.

“(The Middle East) is very wealthy, what can you bring to them? It’s the expertise ... they want to attract talents and different businesses,” Gaw said in an interview. “And we have tenants and business who want to expand there, so we act as a bridge ... to provide them funding and local connections.”

The firm plans to set up a separate vehicle to build an investment track record in the Middle East first before using its main funds in the future.

Gaw, whose main focus has been Greater China and in recent years in Japan and Australia, is also raising a $2 billion fund for private equity and private credit opportunities in Asia Pacific.

The fund is receiving interest from Middle Eastern and Asian investors, as well as in North America, who are looking to diversify amid changing geopolitics.

“Currently the US has many uncertainties. Investors who have been overweighting the US and have done well for many years now may say, ‘I need a little level play’,” Gaw said.

“Asia, on the other hand, has underperformed in the past five years, creating relative value, and people feel they need a repositioning and add some positions in Asia.”

Besides the Middle East, Gaw this year also made investments including more than $1 billion in the Tokyu Plaza Ginza mall in Tokyo with a joint venture partner, and a 45 percent stake in Agility Asset Advisers, a real estate manager in Japan.

In its home market, Gaw said that the firm was focusing on a private credit business linked to upper-middle class residential projects, and was in talks with developers with liquidity needs as well as banks that are selling their non-performing loans.