Riyadh: The “Territory Guide: The Rise of Private Debt Funds in Saudi Arabia” report, released today by Preqin in collaboration with Saudi Venture Capital Company (SVC), provides significant insights into the private debt fund market in Saudi Arabia.

According to Saudi Press Agency, the report indicates that 97% of Middle East-based institutional investors surveyed recognize Saudi Arabia as the most promising market for private debt funds in the next year, a notable increase from 82% in 2023. The report is the first of its kind in the Kingdom, focusing on private debt funds. It highlights that these funds are becoming an appealing asset class in Saudi Arabia and are expected to grow as the Kingdom’s private capital market continues to mature. This growth is driven by increasing interest from local, regional, and global capital sources, alongside the positive impact of the Vision 2030 reforms.

A recent press release from SVC emphasized that since the launch of Vision 2030 in 2016, more than a quarter (27.5%)
of Middle East-focused private debt fund deals have been based in Saudi Arabia. The report further reveals that mezzanine funds constitute half of the total Saudi Arabia exposure in private debt funds that closed between 2016 and Q3 of 2024, with direct lending and venture debt funds comprising 30% and 20%, respectively.

SVC CEO and board member Dr. Nabeel Koshak commented on the report, stating that it underscores the emergence of private debt funds as a key asset class in Saudi Arabia, driven by the Kingdom’s Vision 2030 and its ambition to diversify the economy. He reiterated SVC’s commitment to supporting the development of such reports that provide valuable insights and data to policymakers, investors, and founders for strategic decision-making and policy development.

David Dawkins, the lead author of the Preqin report, noted the growing global interest in Saudi Arabia’s private debt industry. He stated that Saudi Arabia’s success in this area would encourage other developing economies in the Middle Ea
st and beyond to improve transparency and secure the capital needed for sustainable growth in a net-zero world.

SVC, established in 2018 as a subsidiary of the SME Bank and part of the National Development Fund (NDF), aims to stimulate and sustain financing for startups and SMEs from pre-Seed to pre-IPO through investment in funds and direct investment in startups and SMEs.