For much of the past decade, Saudi Arabia has been a major draw for dealmakers, bankers and asset managers seeking capital as its ambitious sovereign wealth fund went on a multibillion-dollar global spending spree.
But as the kingdom reassesses its priorities and the $925bn Public Investment Fund shifts focus to huge domestic commitments, the era of Saudi Arabia being perceived as a source of easy money is drawing to a close.
“It is ending,” said a senior Dubai-based investment banker. “People are realising it.”
Fund managers, bankers and companies that sought to raise capital in the kingdom are already feeling the effects of the shift.
Money managers say Saudi officials have put many more conditions on mandates, often demanding the hiring of local employees and at least some use of funding for investment in domestic companies and projects.
Others are being told that for Riyadh to commit new funds, it wants to see reinvestment in the kingdom, bankers said.
“It is becoming more of a theme,” an insider at the wealth fund explained.
BlackRock, the US asset manager, did secure $5bn from the PIF to anchor a new investment firm in Riyadh, which it announced in April. But its mandate is focused primarily on developing the kingdom’s capital markets.
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