Saudi Arabia’s Public Investment Fund on Wednesday signed a memorandum of understanding with Brookfield Asset Management, under which the wealth fund will serve as a strategic anchor investor for the asset manager’s newly announced private equity vehicle for the region, Brookfield Middle East Partners.

Signed at the eighth edition of Future Investment Initiative, Saudi Arabia’s flagship annual economic conference in Riyadh, the non-binding agreement marks the kingdom’s latest push for financial partnerships that boost private equity investment and economic development within its borders.

While the fund is not limited to Saudi Arabia, at least 50% of the capital will be allocated to investments in the kingdom and to bringing international companies into the local market. The move is in line with Saudi Arabia’s recently-updated Investment Law, which seeks to attract more foreign direct investment — it’s set itself a lofty target of $100 billion in annual FDI by 2030.

Currently, that figure has averaged around $12 billion per year since Vision 2030 was announced in 2017, according to data from the kingdom’s investment ministry — still a long way from that goal.

The PIF, the kingdom’s $925 billion sovereign wealth fund, has deployed billions in capital around the world as it aims to diversify Saudi Arabia’s revenue streams away from oil, materializing the central goal of Crown Prince Mohammed bin Salman’s Vision 2030 campaign. After several years of overwhelmingly investing abroad, PIF Chairman Yasir al Rumayyan on Tuesday confirmed a shift that many regional watchers already observed: the fund will be cutting its foreign investment to focus more on the domestic Saudi market.

Source: CNBC