PIF and BlackRock to Accelerate Growth of Saudi Capital Markets

In a bid to woo foreign investors to Saudi Arabia, BlackRock Saudi Arabia and the Public Investment Fund (PIF) have signed a memorandum of understanding (MoU) by which BlackRock will establish a Riyadh-based multi-asset class investment platform.

It will be anchored by an initial investment mandate of up to $5 billion from PIF, subject to the achievement of agreed milestones between the parties. The non-binding MoU is subject to satisfying certain necessary conditions, regulatory approvals and fulfilling specified milestones.

The entities have expressed the intention to establish BlackRock Riyadh Investment Management (BRIM), which will encompass investment strategies across a range of asset classes, all of which are expected to be managed by a Riyadh-based portfolio management team and supported by BlackRock’s industry-leading global asset management platform.

PIF is playing a leading role in advancing Saudi Arabia’s economic transformation and diversification, as well as driving global economies and shaping the future of industries. Locally since 2017, PIF has created 94 new companies and created over 644,000 direct and indirect jobs.

As Saudi Arabia continues to transform its economy, BRIM will seek to support foreign institutional investment into Saudi Arabia and further enhance the Saudi asset management industry; broaden local capital markets while driving investor diversification across asset classes; and facilitate knowledge sharing and the development of Saudi-based asset management talent.

This complements a series of initiatives by PIF to foster further growth in the Saudi capital market ecosystem and enable a growing international investment management sector based in Saudi Arabia.

BlackRock Chairman and CEO Larry Fink said that one of BlackRock’s most important contributions in the countries in which it was operating was to bring its knowledge and understanding of capital markets to help drive future economic development.

We are excited to build on the deep partnership we have developed with PIF over many years to launch this first-of-its-kind international investment management platform in Saudi Arabia, Fink explained.

“The continued growth of the Kingdom’s capital markets and diversification of its financial sector will contribute to future prosperity for its citizens, the competitiveness of its companies and the resilience of its economy. Saudi Arabia has become an increasingly attractive destination for international investment as Vision 2030 comes to life, and we are pleased to offer investors from around the world the opportunity to take part in this exciting, long-term opportunity,” Fink added.

Part of PIF’s Strategy

Yazeed A. Al-Humied, Deputy Governor and Head of MENA Investments at PIF, said that PIF’s relationship with BlackRock is well established and has been growing.

“Partnering with leading global international companies and asset managers like BlackRock is part of PIF’s growth strategy. This new landmark agreement represents a step forward in PIF’s work in making the Saudi investment and asset management market more internationally diverse and more dynamic,” he added.

BRIM will be fully integrated with BlackRock’s investment capabilities and operating platform benefiting from global market expertise, thought leadership and technology, while facilitating knowledge sharing and further enhancing local investment capabilities. 

BlackRock’s Financial Markets Advisory group – which delivers a range of capital market and risk and analytics advice to official institutions and financial institutions globally – aims to support adjacent initiatives to deepen capital markets and enhance market structure.

BRIM intends to invest in supporting infrastructure, as well as investment research capabilities to boost local insights, through recruiting locally and relocating experienced investment professionals. This includes the launch of the BRIM Graduate Development Program, the establishment of a partnership between PIF Academy and the BlackRock Educational Academy, and industry training and development events.

In October 2023, PIF launched its Managers’ Gate platform and the Portfolio Management Development Program during the PIF Asset Management Forum. Managers’ Gate involves a digital platform for collaboration between PIF and external fund managers.