"Macquarie Group attempts to establish presence in Saudi Arabia following an initial agreement with Saudi Arabia's Public Investment Fund"
The Public Investment Fund (PIF) of Saudi Arabia has been making significant strides in attracting global investment to its infrastructure pipeline. The PIF has recently partnered with several renowned investment managers, including I Squared Capital, Franklin Templeton, Neuberger Berman, and Goldman Sachs, as part of its efforts to increase investment in the kingdom.
These partnerships, which were established during U.S. President Donald Trump's tour of Gulf countries in May, are aimed at boosting investment in sectors like digital infrastructure, electric vehicle infrastructure, and energy storage. One such agreement involves the Jafurah gas processing facilities owned by Saudi Aramco.
The PIF has also entered into several non-binding Memorandums of Understanding (MoUs) with asset managers, a less formal agreement that does not always result in cash transactions. These MoUs are a significant step in attracting global capital and expertise to Saudi Arabia.
The top-ranked foreign investment banker, Goldman Sachs, has a strategic collaboration with PIF for various financial services and investments. Last month, BlackRock's GIP signed an $11 billion infrastructure agreement with Saudi Aramco, further demonstrating the growing interest in Saudi Arabia's investment opportunities.
Saudi Arabia aims to raise $100 billion in Foreign Direct Investment (FDI) by 2030 as part of its Vision 2030 program. This program aims to reduce oil dependency and grow the private sector. To encourage FDI, Saudi Arabia implemented a regional headquarters program in 2024, requiring firms to move their headquarters to Riyadh for eligibility in government contracts.
As of February 2023, nearly 600 firms have complied with this program. The latest MoU, signed on Monday, is another step forward in achieving Saudi Arabia's FDI goals. However, the current FDI numbers are still far from the target.
In addition to these partnerships, Macquarie Asset Management is planning to establish an office in Saudi Arabia, further solidifying the country's position as a hub for global investment. These developments underscore Saudi Arabia's commitment to attracting foreign investment and achieving its Vision 2030 objectives.
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