French to invest in Saudi fund

29 June 2015

$400m fund to focus on Saudi SMEs

  • French Caisse des Depots International Capital is to create with local Kingdom Holding a fund to invest in small and medium companies in Saudi Arabia
  • The value of the fund will begin at $100m and eventually reach $400m

France’s Caisse des Depots International Capital (CDDIC) has signed a memorandum of understanding with Saudi Arabia’s Kingdom Holding to create a $400m fund to invest in companies and projects in Saudi Arabia.

CDDIC and Kingdom Holding will initially contribute SR375m ($100m) to the jointly managed fund.

CDDIC will contribute a further SR375m in a second round. Third party investors will also be invited to participate, bringing the fund’s total value to SR1.5bn ($400m). Large French corporates are expected to invest in the fund.

The investment fund will seek investment opportunities in small and medium size enterprises in Saudi Arabia.

The Caisse des Depots Group is a state-owned investor which targets long-term development projects in France and internationally.

Kingdom Holding is an investment vehicle for Prince Alwaleed bin Talal al-Saud, who owns 95 per cent of the company. The remaining 5 per cent is traded on the Saudi stock market, the Tadawul. It had assets of SR3.8bn at the end of 2014.

The announcement coincides with the opening of the Tadawul to qualified foreign investors. However, the initiative to encourage foreign investment has not yet shown results. The Tadawul all-shares index has fallen 2.9 per cent since the opening on 15 June.

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