Saudi Venture Capital to increase allocation to private credit funds

Saudi Venture Capital (SVC), a state-backed investor and part of the National Development Fund (NDF) with more than US$3 billion in its assets under management, is changing its investment strategy.

Bloomberg has reported that SVC, which acts as a fund of funds, will channel more money into private credit funds, betting the asset class will capture a larger share of business in the Kingdom. It will allocate half of its investments to private credit and equity, up from about a third last year. The rest will be used for venture funding.

Chief Executive Officer Nabeel Koshak told Bloomberg: “We are re-designing our portfolio strategy based on the evolution and growth of the ecosystem.

“Private credit specifically is at the nascent stage so we also plan to do more to raise awareness on how it actually complements filling the gap on SME financing.”

Koshak, speaking ahead of the Private Capital Forum in Riyadh, added that companies in Saudi Arabia, including small and medium-sized enterprises (SMEs), are seeking new sources of financing amid tightening liquidity conditions that make it more challenging to secure traditional capital through banks.

Private credit and equity will feature large on the forum agenda as both witness growing demand across the broader Middle East Gulf region.

Launched in 2018, SVC has a mandate to invest $3 billion by 2030 to develop the financing ecosystem for startups and SMEs. It only recently started investing in private credit and venture debt. It has backed Partners for Growth, Ruya Partners, and also PE giants General Atlantic and VC fund Global Ventures.