King Street Capital Management is planning to build a presence in Saudi Arabia, joining a growing wave of global investors looking to capitalize on the kingdom’s $2 trillion economic transformation plan.
The $28.5 billion alternative asset manager is applying for a license from the Saudi Capital Market Authority that would allow it to operate and manage client funds locally, according to people familiar with the matter who declined to be identified because the information is confidential. King Street invests in credit, real estate and collateralized loan obligations and also runs hedge and drawdown funds.
In August, the firm signed a memorandum of understanding with Saudi Real Estate Refinance Co., a unit of the $940 billion Public Investment Fund, to help banks offload retail mortgages to investors. The deal was aimed at attracting foreign capital to Saudi markets and supporting the kingdom’s Vision 2030 housing goals.
Representatives for King Street and PIF declined to comment. The Saudi Real Estate Refinance Co. did not respond to requests for comment.
The move comes as the kingdom has been encouraging global investors to establish a physical presence in the country or risk losing business with government entities. In May 2024, Goldman Sachs Group Inc. became the first Wall Street bank to secure a regional headquarters license.
Meanwhile, BlackRock Inc. announced it would receive as much as $5 billion from the PIF to invest in the Middle East and build a Riyadh-based investment team. The world’s largest asset manager also received approval to establish a regional headquarters in the Saudi capital and was enlisted to help develop the kingdom’s mortgage-backed securities market.
King Street already maintains a regional presence in Dubai, where its Middle East managing managing director, Reda Zebdi, is based. The emirate and its neighbor Abu Dhabi have drawn marquee firms in recent years including Andurand Capital Management and Brevan Howard Asset Management. The Dubai International Financial Centre alone now hosts more than 70 hedge funds, majority of which manage over $1 billion in assets.
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