97 per cent of Middle East-based surveyed institutional investors view Saudi Arabia as the most promising market for private debt funds in the upcoming year, according to the “Territory Guide: The Rise of Private Debt Funds in Saudi Arabia” report, published by Preqin and the Saudi Venture Capital Company (SVC).
It marks a notable increase from 82 per cent in 2023.
The SVC said the report is the Kingdom’s first-of-its-kind, focused on private debt funds. The report emphasises that private debt funds are increasingly becoming an attractive asset class in Saudi Arabia, and are expected to grow as the Kingdom’s private capital market continues to mature.
Investment in Saudi Arabia
This trend is attributed to a rising interest from local and regional investors and global sources of capital, alongside the positive impact of the Vision 2030 reforms.
The SVC said: “Since Vision 2030 was launched in 2016 and up to 2024-Q3, more than a quarter (27.5 per cent) of Middle East-focused private debt fund deals were based in Saudi Arabia”.
The report also revealed that of the total private debt funds with Saudi Arabia exposure that closed between 2016 and Q3 of 2024, mezzanine funds represent half of the total Saudi Arabia exposure, followed by direct lending and venture debt funds, at 30 per cent and 20 per cent, respectively.
SVC CEO and board member Dr. Nabeel Koshak said: “This report highlights the emergence of private debt funds as a key asset class in Saudi Arabia, driven by the Kingdom’s Vision 2030 and its ambition to diversify the economy.
“At SVC, we continue our commitment to support the development of such reports that provide policymakers, investors, and founders with insights and data to inform strategic decisions and policies to nurture the private capital ecosystem further.”
Lead author of the SVC and Preqin report David Dawkins highlighted the growing global interest in the Kingdom’s private debt industry.
He said: “For other developing economies in the Middle East and beyond, Saudi Arabia’s success in this area will strengthen the impetus for improving transparency to secure the capital needed for sustainable growth in a net zero world”.
SVC is an investment company established in 2018, a subsidiary of the SME Bank, part of the National Development Fund (NDF).
It aims to “stimulate and sustain financing for startups and SMEs from pre-Seed to pre-IPO through investment in funds and direct investment in startups and SMEs”.
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