KARACHI: Pakistani and Saudi investors launched a private equity fund on Monday as part of both countries’ wider push to deepen two-way private sector trade and investment.
The Saudi-Pakistan Joint Business Council, formed by the governments of both countries, said the initial size of the fund is ‘multi-hundred million’, which is expected to expand based on opportunities across sectors.
According to a statement, private investors from both countries will contribute equally tothe fund, while 75pc of the fund shall be invested in Pakistan, and 25pc in Saudi projects.The fund identified highgrowth private businesses in the agriculture, mining and industrial sectors including construction as its primary investment targets.
It will also explore commercial projects arising from the government’s programme to monetise its land bank, including airports, motorways, ports and maritime development.
‘This will help unlock the economic value of under-utilised public land through commercially structured, transparent investment s,’ the st atement said.
The fund will also seek commercial investments across Saudi Arabia, including in the holy cities of Makkah and Madina.
The MoU signed on Monday allows for institutions on both sides to be invited to participate in the equity of the fund management company.
Speaking at the signing ceremony, council chairman Prince Mansour bin Mohammad Al Saud said that while the friendship and kinship between Pakistan and Saudi Arabia run deeper than any agreement, this fund will give that bond an equally strong commercial footing.
Praising Pakistan’s stable economy for providing real opportunities, he said: ‘Pakistan is a natural partner for the Kingdom, and Saudi investors are lookingfor partners and markets where they can grow with confidence.
‘By investing side by side with our Pakistani brothers, in both our countries, we are turning years of contemplationand studies into on-ground investment that benefits both our peoples and building a partnership designed to last,’ he said.
Speaking on the occasion, leading businessman Arif Habib termed the fund ‘a vote of confidence in profitable investment opportunities in Pakistan’.
‘For too long, perceptions of Pakistan have clouded the reality, and this agreement shows that serious investors are ready to act on that reality.
Insiders said that the Arif Habib Group is expected to play a pivotal role as ‘a key Pakistani investment partner, capital mobiliser and strategic investment facilitator’ in the private equity fund.
Thegroupcouldleverageits considerable experience in Pakistan to help identify commercially viable opportunities, particularly in the fields of agriculture, mining, construction and infrastructure.
Through its investment, financial advisory and private equity expertise, the group could facilitate deal structuring, due diligence and execution.
Alluding to this potential, Mr Habib hoped that directing capital towards the monetisation of the government’s land bank will turn idle assets into productive investment.
Noting that the fund will comply with Pakistani and Saudi regulatory regimes, thestatement said that once approvals are in place, the two sides will move ahead with the fund’s structuring and first investments.
The launch of the fund comes at a time when Islamabad and Riyadh are deepening longstanding ties, especially in defence, amid few signs of a breakthrough in the months-long US-Iran conflict.
The signing ceremony on Monday was attended by members of the SaudiPakistan Joint Business Council from both countries.
The Pakistani side was represented by Arif Habib, Bank of Punjab President Zafar Masud, HBL President Nassir Saleem, Faysal Bank CEO Yousaf Hussain, Ismail Industries Director Maqsood Ismail, Lake City Group Chairman Gohar Ejaz, Bestway Group Chairman Lord Zameer Choudrey, while Fatima Group Chairman and council co-chair Fawad Mukhtar and UBL President Jawaid Iqbal joined virtually.
From the Saudi side, council chairman Mansour bin Mohammad Al Saud was joined by both vice chairmen Mohammad bin Abdulaziz Al Ajlan (CEO of Al Ajlan Group), Abdulaziz Bin Ali Al Ashrafi (Tayba Group), and other council members.
With input from Reuters