Ruya Partners, already backed by units of Middle East heavyweights including Mubadala Investment Co. and Saudi Arabia’s Public Investment Fund, is tapping investors ranging from family offices to pensions and endowments for a $400 million fund, according to Omar AlYawer, a partner.
It expects to make its first close in the coming months, he said in an interview in Riyadh. Ruya will primarily focus on middle-market lending through the fund but aims to expand into strategies like real estate and infrastructure credit in the next three years, he added.
That would make Ruya one of the most prominent players in private credit in the Gulf, where new deals are arising from the need for alternative financing. Saudi Arabia has emerged as a place of new interest as banks slow their pace of credit growth at a time when companies and government entities need more capital to drive economic diversification projects under the Vision 2030 agenda.
“We’re only in the second inning in regional private credit, especially in Saudi Arabia where there are financing needs across the spectrum,” AlYawer said. “Almost everyone is coming out with a version of what private credit is for them and trying to strike it in a different way.”
Janus Henderson and Saudi Arabia’s Jadwa Investment Co. are among the other firms raising private credit funds in the region, while Goldman Sachs Group Inc.’s asset management unit signed an agreement with the kingdom’s $1 trillion sovereign wealth fund last year to launch a series of new funds focused on strategies including private credit in the Gulf.
KKR & Co.’s recent deal with Acwa Power Co. offers one of the latest examples of a financial giant making its foray into the kingdom.
Still, AlYawer sees significant gaps for Saudi businesses looking for loans of $10 million to $50 million, a range often overlooked by banks and too small for Wall Street players.
The latest fund is likely to focus primarily on Saudi Arabia and the United Arab Emirates, with the former seeing the bulk of the activity, AlYawer said. “Private credit is one of the most crucial things needed in the next three to four years to augment Vision 2030.”