Saudi Arabia’s sovereign wealth fund Public Investment Fund (PIF) and the Hong Kong Monetary Authority (HKMA) signed an agreement on Thursday to anchor a joint fund with a target size of $1 billion, according to an announcement.
The fund will scout for investments in the manufacturing, renewables, fintech and healthcare sectors, looking to support the localisation in Saudi Arabia of companies connected to Hong Kong and southern China’s Greater Bay Area.
“The new fund would promote foreign direct investments via Hong Kong, providing a platform for companies to internationalise their businesses and have access to attractive investment opportunities in Saudi Arabia,” the HKMA statement said.
PIF and HKMA signed a memorandum of understanding (MoU) at the Future Investment Initiative in Riyadh. The annual summit, referred to as ‘Davos in the Desert’, claims it is the largest international investment and innovation forum in the Middle East. Last year, the summit was brought to Asia for the first time when it was held in Hong Kong.
Earlier this week, Hong Kong Science and Technology Parks and Saudi Arabia’s startup incubator Beta Lab inked a $300 million investment fund to give Hong Kong’s fintech companies access to financing from the Middle East.
The partnership follows one of many moves to strengthen ties between Saudi Arabia and Hong Kong, driven by China’s souring political ties with the US and the Middle Eastern country’s desire to diversify from its oil-dependent economy.
PIF is one of the largest sovereign wealth funds in the world with estimated assets of $925 billion. It was created in 1971 to invest on behalf of the Government of Saudi Arabia.
HKMA is Hong Kong’s central bank. It controls the Exchange Fund, the city’s de-facto sovereign wealth fund, which manages around $517 billion in assets and invests in equities, bonds, foreign exchange and other securities and assets.
