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New York-Based Lender Pledges Up to $2 Billion Saudi Investments

Skyscraper offices in the King Abdullah Financial District (KAFD), on the city skyline beyond residential and commercial buildings, viewed from the Kingdom Center, in Riyadh, Saudi Arabia, on Thursday, Jan. 19, 2023. Mostly shut off to foreign visitors for years, Crown Prince and de facto ruler Mohammed bin Salman has unveiled an ambitious push to use tourism as a way to help diversify the oil-dependent economy. Photographer: Jeremy Suyker/Bloomberg (Jeremy Suyker/Bloomberg)

(Bloomberg) -- New York-headquartered Z Capital Group plans to invest as much as $2 billion in Saudi Arabia, as it seeks to expand its presence in the Middle East.

The privately held merchant bank will launch an up to $1 billion direct lending fund early next year offering senior secured and asset-backed loans to small and medium-sized businesses, mostly based in Saudi Arabia, according to a statement. 

ZCG also said it would deploy as much as $1 billion in private equity, private credit and infrastructure investments across the region, with the support of Saudi Arabia’s ministry of investment.

The lender also named Mohammed Aldekmary chief executive officer for Middle East and North Africa. Aldekmary, who previously worked as a senior advisor to the kingdom’s minister of investment, will lead ZCG’s newly opened office in Riyadh.

The investment pledge — made on the sidelines of the Future Investment Initiative summit — comes at a crucial time for the kingdom and its crown prince’s trillion-dollar Vision 2030 economic development plan.

Saudi Arabia’s foreign direct investment inflows amounted to about $26 billion last year, above the government’s target but still the lowest level since 2020. Investment Minister Khalid Al-Falih told Bloomberg TV on Tuesday that the recent FDI figures are “extremely positive,” while conceding the kingdom has a long way to go to meet its 2030 goal of attracting $100 billion a year. 

The country has also been relying heavily on debt as it grapples with budget deficits and low oil prices. 

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