Saudi Arabia’s sovereign wealth fund, the Public Investment Fund (PIF), has agreed to anchor a new private credit fund focused on the Middle East, managed by King Street Capital Management.

King Street and PIF have signed a non-binding memorandum of understanding (MoU) to expand private credit investment in Saudi Arabia and the wider Middle East and North Africa (Mena) region.

Under the MoU, which was announced on the sidelines of the FII PRIORITY Miami Summit, PIF will act as the anchor investor in King Street’s fund. The fund will provide private capital to corporates and conduct asset-based lending across Saudi Arabia and the broader Mena region.

The fund responds to growing demand from local and regional businesses for capital in the region, both firms said.

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“We believe the regional private credit market will need to grow by at least 15-30 per cent annually over the next five years to finance economic development in Saudi Arabia and the Mena region,” said Brian Higgins, founder and managing partner of King Street. “Leveraging our deep experience in global credit markets and partnering with PIF, we will seek to drive foreign and domestic investment into the region.”

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King Street manages $30bn (£22.6bn) in assets and has been expanding its presence in Saudi Arabia and the wider Mena region in recent years as it seeks to capitalise on new investment opportunities.

The manager added that it is currently in the process of opening an office in Riyadh.

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