#Saudi Fund With $3 Billion Mandate Plans Boosting Private Credit - Bloomberg

Saudi Fund With $3 Billion Mandate Plans Boosting Private Credit - Bloomberg

Saudi state-backed investor, Saudi Venture Capital, is reshaping its $3 billion investment strategy to channel more money into private credit funds, betting the asset class will capture a larger share of business in the kingdom.

SVC — which primarily acts as a fund of funds — plans to allocate half of its investments to private credit and equity, from about a third last year, according to Chief Executive Officer Nabeel Koshak. The rest will back venture funding, he said.

“We are re-designing our portfolio strategy based on the evolution and growth of the ecosystem,” Koshak said in an interview with Bloomberg on Tuesday. “Private credit specifically is at the nascent stage so we also plan to do more to raise awareness on how it actually complements filling the gap on SME financing.”

Companies in Saudi Arabia including small and medium-sized enterprises are increasingly seeking new sources of financing amid tightening liquidity conditions that make it more challenging to secure traditional capital through banks, according to Koshak.

The SVC chief spoke ahead of the Private Capital Forum in Riyadh on Wednesday, where the fund will gather investors and policymakers for discussions on regulatory challenges and financing gaps in the market. Private credit and equity will feature large on the agenda as both witness growing demand across the broader Middle East Gulf region.

The need for financing has become acute in Saudi Arabia as the kingdom seeks to drive spending on Crown Prince Mohammed bin Salman’s plan to diversify the economy away from oil and turn it into a hub for everything from entrepreneurship to finance and investing.

Saudi Arabia’s Public Investment Fund has already stepped into private credit with agreement earlier this year to anchor new funds from Goldman Sachs Asset Management focused on the Gulf. Venture debt is also seeing signs of budding, with Stride Ventures among those deploying capital in the kingdom.

SVC only recently began pivoting to private credit and venture debt, with investments in Partners for Growth and Ruya Partners. It has also backed PE giants including General Atlantic and VC funds like Global Ventures.

Launched in 2018, SVC has a mandate to invest $3 billion by 2030 to develop the financing ecosystem for startups and SMEs. It has invested about $300 million a year in each of the last two years and intends to keep the pace in 2026, Koshak said.