Saudi Arabia: Growing Market for Private Debt Funds

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RIYADH — The "Territory Guide: The Rise of Private Debt Funds in Saudi Arabia" report, published today by Preqin in partnership with the Saudi Venture Capital Company (SVC), reveals a growing interest in private debt funds within the Kingdom. The report shows that 97% of Middle East-based institutional investors now view Saudi Arabia as the most promising market for private debt funds in the coming year, up from 82% in 2023. This surge in interest is attributed to the Kingdom's Vision 2030 reforms and the ongoing development of Saudi Arabia’s private capital market. As Saudi Arabia's economy continues to diversify, private debt funds are becoming a more attractive asset class for investors. The report also highlights that since the launch of Vision 2030 in 2016, more than a quarter (27.5%) of all Middle East-focused private debt fund deals have been based in Saudi Arabia. Mezzanine funds make up half of the total Saudi exposure, followed by direct lending at 30% and venture debt at 20%. This trend underscores the increasing role of private debt funds in the Kingdom's financial landscape, driven by growing investor interest both locally and internationally.

According to SVC CEO and board member Dr. Nabeel Koshak, "This report demonstrates the rapid growth of private debt funds in Saudi Arabia as a key asset class, and reflects our commitment at SVC to support the development of such opportunities in the Kingdom. Our goal is to continue providing data and insights to help inform strategic decisions and policies to strengthen the private capital ecosystem." Lead author of the Preqin report, David Dawkins, noted the growing global interest in Saudi Arabia’s private debt market, stating, "Saudi Arabia’s success in the private debt space will encourage other developing economies to invest in this area, helping to build the necessary transparency for sustainable growth in a net-zero world."