Saudi-Pakistan private equity fund to start at $500m, investors say
Arif Habib, who signed the memorandum for the Pakistani side in Karachi, says regulatory approval will take at least three months before capital is called.
A proposed Saudi-Pakistan private equity fund will seek about $500 million at the outset and could later grow into the billions of dollars, Pakistani investor Arif Habib said, after the Saudi Pakistan Joint Business Council signed a memorandum of understanding in Karachi on Monday to establish it.
Arif Habib, chairman of Arif Habib Group, signed the memorandum for the Pakistani side. He told Arab News Pakistan in Karachi that regulatory approval would take at least three months and that work on registering the fund's management company in the relevant jurisdiction was already under way, Independent Urdu reported. Investors would be invited to commit once that process is complete.
Under the proposed structure, private investors from the two countries put in equal shares, with 75 percent of the capital assigned to projects in Pakistan and 25 percent to projects in Saudi Arabia. The fund will look for opportunities in agriculture, mining, technology, manufacturing, construction and real estate, and infrastructure that can be made commercially viable.
The fund will also review commercial projects expected to emerge from the government's land bank monetisation programme, including airports, motorways, and port and maritime development, Express News reported.
Independent Urdu listed the Saudi participants as Al Ajlan Group, Taiba Group, Reem Group, Al Sharif Group, Saudi Meters Company, Sumo Global Investment, Bin Dawood Investment, Asyad Holding Group and Red Sea Gateway Terminal. The groups span investment, real estate, energy, infrastructure and transport. Their presence on the list does not amount to confirmed financial commitments to the fund, the outlet reported.
Prince Mansoor bin Mohammed Al Saud, chairman of the joint business council, said the fund would give the two countries' long-standing ties a firmer commercial base. "Pakistan is a natural partner for the Kingdom and Saudi investors are looking for partners and markets where they can grow with confidence," he said, according to Express News, which led its report with his remarks.
Arif Habib said several projects had been identified and discussed but not yet formalised, naming the Main Line-1 railway between Karachi and Peshawar and government land development as potential opportunities. The fund will have a board and a management committee with Saudi and Pakistani representatives, and a chief executive appointed through mutual consultation.
He acknowledged that earlier investment agreements between the two countries had often failed to turn into substantial investment, but said this effort was different because private investors from both countries are leading it. "This time, the private sector has been given the lead," he said.
Fawad Mukhtar, the council's Pakistani co-chairman and chairman of Fatima Group, joined the Karachi ceremony virtually, Express News reported.
How the reports differ
Independent Urdu led with Arif Habib's $500 million first-round target, his estimate of at least three months for regulatory approval, and named the nine Saudi groups on the participants list. Express News led with Prince Mansoor bin Mohammed Al Saud's remarks and put the fund's size only at hundreds of millions, adding that it will examine projects from the land bank programme such as airports, motorways, and port and maritime development. Express News also reported that Fawad Mukhtar, the council's Pakistani co-chairman, attended the Karachi ceremony virtually, a detail Independent Urdu did not carry.
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