#Saudi Wants Family Offices to Help Build Americas Investment - Bloomberg

Saudi Wants Family Offices to Help Build Americas Investment - Bloomberg

Before 2020, Saudi Arabian investment in Brazil was so small that it didn’t even appear in the central bank’s database for relevant foreign inflows.

That figure jumped sevenfold to $4 billion through 2023, and should keep growing, said Abdulrahman Bakir, managing director of the Americas for the Saudi Investment Ministry.

Key to increasing the two-way flows of money between Brazil and Saudi Arabia — as well as with the rest of Latin America — is connecting institutional investors, private companies and especially family offices, which are multiplying globally and becoming a bigger source of capital, Bakir said.

Last year, the ministry hosted a delegation of 100 Saudi officials, executives, investors and members of family offices to tour seven countries in Latin America over 10 days which led to $3.5 billion of potential investments through memorandums of understanding.

“Think about it as an umbrella of investors,” Bakir said last week in an interview on the sidelines of the Future Investment Initiative Institute event in Rio de Janeiro. “The sovereign wealth fund, private companies, public companies and family offices. We’re trying to really emphasize a lot now in family offices.”

There’s a plan to connect the top 20 family offices from both countries in “upcoming engagements” this year, he said.

Since taking the Washington-based role, Bakir said he’s pitched his boss, Investment Minister Khalid Al-Falih, on expanding their focus to include Latin America and received support.

“The US relationship is very important. It’s been there for ages,” he said. “Frankly, you don’t need me or anyone, no one can really shake the US because it’s the strongest ally for Saudi. But what about South America?”

That’s led to bilateral roundtables from Sao Paulo to Riyadh and even one at the Milken Institute event in Los Angeles in 2022. Fifty Brazilian companies attended the FII event in Riyadh that year compared with five a year earlier. UBS Group AG hosted a Brazil-Saudi dinner at Davos last year, Bakir said.

Major Saudi capital allocations to Brazil include $400 million of direct investments from sovereign wealth fund PIF in funds overseen by Patria, a large alternative-asset manager, according to data provided by Bakir. Manara Minerals bought a stake in miner Vale SA’s base metals unit for $2.6 billion and state-owned SALIC has stakes in Brazilian food producers Minerva and BRF.

Food, medical devices, pharmaceuticals, cosmetics, tourism, mining and petrochemicals are among industries in Brazil that are attractive for Saudi investors, he said. Saudi Arabia is also working to lure more Brazilian companies to set up production facilities and offices there.

Some of the hurdles in the new relationship include regulatory issues, bureaucracy and finding more efficient ways to connect the private sector in both countries.

“Latam is one of the few regions where you have more opportunities than capital,” Bakir said. “In the Middle East, it’s the opposite. So if you come at the sweet spot your returns can be much, much higher.”