Martin Kunzmann and I were discussing this today while looking ahead to our Saudi Arabia Credit & Investment Forum in Riyadh next week.
There is a huge amount written about capital in Saudi Arabia: how much exists, where it comes from, the scale of PIF, international investment into the Kingdom, the growth of private markets, the development of family offices and the emergence of private credit.
But we kept coming back to a slightly different question:
How is that capital actually being deployed?
For an allocator, having capital available is only the beginning.
The harder questions are where to put it, when to deploy it, through which manager or structure, how to price the risk, how much liquidity to sacrifice, what downside protection exists — and ultimately, how the capital comes back.
And in Saudi Arabia, those questions are becoming increasingly interesting.
From capital accumulation to capital efficiency
One of the clearest signals comes from PIF itself.
PIF's 2026–2030 strategy describes a transition towards sustained value creation, with greater emphasis on investment efficiency, long-term risk-adjusted returns, value realisation and increased private-sector participation.
PIF reports assets under management of more than $900 billion and more than $199 billion invested in new projects in Saudi Arabia between 2021 and 2025.
That change in emphasis matters.
The conversation is increasingly moving from “Where can capital be put to work?” to “Where should capital be put to work — and on what terms?”
That is a very different investment environment.
It requires selectivity. It requires proper underwriting. And it puts considerably more emphasis on managers, structures, governance, risk-adjusted returns and ultimately realisation.
Saudi Arabia is becoming a two-way capital market
This is not simply about Saudi capital investing overseas.
Saudi Arabia is increasingly both a source and destination of institutional capital.
According to data published by Saudi Venture Capital and reported by the Saudi Press Agency, foreign investors deployed SAR 20 billion — approximately $5.3 billion — into Saudi private markets during 2025, representing around 60% of total private-capital investment in the Kingdom.
The number of foreign institutions participating in the market increased from 28 in 2019 to 148 in 2025.
That is a significant shift.
But the more interesting development may be how domestic and international capital are beginning to meet.
In July, Brookfield announced the approximately $2 billion first close of Brookfield Middle East Partners, anchored by PIF and other institutional investors. The fund is targeting investment across the Middle East and intends to allocate around 50% of its investments to Saudi Arabia.
In credit, PIF and King Street announced plans for a dedicated private-credit strategy targeting Saudi Arabia and wider MENA, covering corporate capital solutions, asset-based lending and selected special situations.
Meanwhile Jada Fund of Funds — itself established by PIF — is investing across venture capital, private equity and private debt, and in April announced another commitment to a private-debt strategy through Stride Ventures Debt Fund V.
This is an important evolution.
Capital is no longer moving in one direction.
Saudi institutions can anchor international expertise. International managers can bring additional capital into Saudi opportunities. Local managers can build increasingly sophisticated investment products. And global and regional allocators can participate across a much broader spectrum of the capital structure.
The allocator's job is getting harder — and more interesting
For allocators, this presents opportunity.
It also creates complexity.
Selecting a manager is only one part of the decision.
What is the underlying opportunity? Where does the return really come from? Is the investor being adequately compensated for illiquidity? How much of a projected return depends on leverage or multiple expansion?
What happens if an asset takes two years longer to realise than originally forecast? How robust is the security package? Who controls the situation if performance deteriorates? How mature is the local restructuring and enforcement environment?
And perhaps most importantly:
What is the exit?
These questions matter in every private market. But they become particularly important when a market is developing rapidly.
Deployment and recovery belong in the same conversation
This is where private credit becomes especially interesting.
When we talk about deploying capital, we cannot only discuss origination.
We also have to talk about monitoring. Covenants. Early-warning indicators. Refinancing. Restructuring. Recovery. And exit.
The deployment decision and recovery strategy should never really be separate conversations.
An allocator considering a private-credit fund should understand not only how that manager originates attractive loans, but what the manager does when one of those loans stops behaving as expected.
An investor considering infrastructure or real estate should look beyond projected cashflows towards refinancing risk, security, duration and liquidity.
A family office allocating to alternatives should understand not simply the promised return but where it sits in the capital structure and what protects it if circumstances change.
That is what a maturing private market looks like.
This is exactly the conversation we want in Riyadh
This is also why Martin and I are particularly keen to speak to the allocators, investors and managers already joining us in Riyadh.
The current room is becoming a fascinating cross-section of the capital ecosystem.
Among the institutions represented are Jada Fund of Funds, NEOM Investment Fund, SEDCO Capital, Sulaiman Al Rajhi Holding, Al Rajhi Capital, SNB Capital and ANB Capital, alongside investment managers and capital providers including Ruya Partners, Impact46, Merak Capital, Centricus, Fasanara Capital, ShoreVest Partners and Affirma Capital.
Then there is the banking and credit side of the market, with organisations including Deutsche Bank, HSBC Saudi Arabia, Saudi Awwal Bank, Banque Saudi Fransi, Bank AlJazira and SC Lowy represented in the room.
That mix matters.
Because we do not particularly want a theoretical debate about whether Saudi Arabia represents an interesting investment opportunity.
That question has largely been answered.
What Martin and I want to understand from the people actually deploying capital is much more practical:
- Where are you seeing genuine opportunities today?
- What are you not investing in — and why?
- What returns are necessary to compensate for the risk?
- What structures are allocators actually asking managers to create?
- Where are Saudi family offices allocating differently from three or five years ago?
- How important will private credit become within those portfolios?
- What needs to develop before larger pools of institutional capital can be deployed?
- What happens to that capital when an investment doesn't go according to plan?
Our latest Riyadh programme has deliberately been constructed around that lifecycle — from capital allocation and origination through execution, monitoring, restructuring, recovery and realisation.
The next Saudi story may be the capital stack
Saudi Arabia's transformation has understandably generated enormous discussion around equity investment.
But sophisticated private markets require more than equity.
They need banks. Public debt. Sukuk. Direct lending. Asset-backed finance. Private debt. Mezzanine capital. Infrastructure finance. Special-situations capital. Restructuring expertise. Secondary markets. And ultimately efficient mechanisms through which investors can realise their capital.
The development of those layers may prove every bit as important as the amount of capital entering the market.
Saudi Arabia unquestionably has enormous investment firepower.
Increasingly, though, the interesting question isn't how much capital there is.
It's how that capital is being deployed.
Where it goes. Who manages it. How it is structured. How the risk is priced. How it is protected. And how it ultimately comes back.
Martin and I are looking forward to discussing exactly that with the people already joining us in Riyadh on 7–8 October 2026.
And if you are allocating or deploying capital in Saudi Arabia or across the GCC, we'd genuinely like to hear your perspective.
Join the Riyadh conversation →
Sources
- Public Investment Fund — PIF 2026–2030 Strategy
- Saudi Press Agency / Saudi Venture Capital — international investment in Saudi private markets
- PIF / Brookfield — Brookfield Middle East Partners first close
- PIF / King Street — private credit investment opportunities in Saudi Arabia and MENA
- Jada Fund of Funds — Stride Ventures Debt Fund V commitment
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