The fund will mirror the structure of another DIC affiliate, Jordan Dubai Capital (JD Capital), a $300m fund that invests in Jordan.

“The opportunities in Saudi Arabia merit a country-specific fund,” says Sameer al-Ansari, chief executive officer of the DIC.

Like JD Capital, the Saudi Arabian fund will look for strategic local investors.

“They will help us with deal flow and to pull the right strings when they need to be pulled. You need offices in Jeddah and Riyadh to be able to access the right deals and talk to the right family business,” says Al-Ansari.

DIC plans to more than triple the $1.5bn it has invested in the Middle East, to reach $5bn of assets under management by 2013. It currently has stakes in 12 companies in the region.

In September 2006, DIC partnered with HSBC and Al-Waha Capital, formally Oasis International Leasing, to launch a $500m infrastructure fund targeted at the region.

“Moving to country specific funds will help us invest in the region,” says Al-Ansari.

According to Al-Ansari, the crisis in the global credit markets has not affected the private equity market in the region and banks in the UAE remain extremely liquid.

“I don’t see [the credit crunch] having a meaningful impact on the banking sector or transactions,” he says.

DIC is also investing in India and China, where it expects to announce transactions in the coming months.