Saudi Arabia’s sovereign public investment fund is set to become an anchor investor in a new $ 800 million Gulf infrastructure fund set up by Aberdeen Standard Investments and Investcorp, people reported on the strategy of the bottom.
Bahrain-based Investcorp, the Middle East’s largest alternative investment manager, is finalizing the first closure of the $ 250 million infrastructure fund, which could be announced as early as next week, people added.
Last month, Aberdeen Standard Investcorp Infrastructure Partners announced Sir Michael Fallon, former UK Minister, as chairman of the investment platform, replacing Lord Gerry Grimstone, former chairman of Barclays and Aberdeen Standard Investment, who he became the UK’s investment minister.
The PIF, which has become the most dominant force for economic development in Saudi Arabia under Crown Prince Mohammed bin Salman, will be an investor still close to a major Asian institution.
The Aberdeen / Investcorp fund plans to invest in social infrastructure projects in all Gulf states, including health care, education, social housing, water and digitalisation.
“The pipeline is amazing,” one of the people said. “There is a great opportunity in social infrastructure, especially health.”
Investcorp declined to comment. Aberdeen and PIF did not respond to requests for comment.
The fund bets that the new generation of Gulf leaders in countries such as Saudi Arabia and Oman will give priority to social development in their economic transformation plans.
The fund has attracted interest from financial institutions and Gulf family offices, which are both willing to spread excess funds after the pandemic, people said.
Investcorp, which began its life nearly 40 years ago as a conduit for these Gulf-rich households to invest oil-rich assets back in Western markets, seeks to grow its assets under management from $ 35bn to $ 50bn per year. the next five years. The company is in the process of clearing the stock market in Manama.
People added that Asian investors have also allocated money at the first closing of the fund while seeking exposure to an oil-rich region that combines exposure to emerging markets with minimal exchange rate risk due to values of the Gulf economies that are pegged to the U.S. dollar.
Aberdeen, which manages $ 607 billion in assets, and Investcorp have identified social infrastructure as key sectors expecting to receive an increase in investments following regional economic development plans.
The pandemic, which has put many regional health systems under pressure, has drawn the attention of governments to the importance of strengthening their hospital systems and staff.
Similarly, developing digital services across the region has become more important as companies have to adapt to coronavirus restrictions. The development of education and social housing have also been a priority, but progress has been lacking.
The participation of the PIF in the fund is expected to facilitate access to the large Saudi market, where the economic reform program of Crown Prince Mohammed bin Salman seeks to accelerate the construction of houses, the privatization of state assets , including health facilities, and the development of the private education system.
“Naturally, PIF provides a significant boost in the Saudi market,” the person said.