Saudi-Pakistan fund: 75% of new private equity fund to go to Pakistan

A council of Saudi and Pakistani investors launched a private equity fund on Monday, 9 November, and three quarters of it is meant for Pakistan. The Saudi-Pakistan Joint Business Council said the fund’s starting size is “multi-hundred million” dollars and that it should grow as more deals appear; the remaining quarter will finance projects in Saudi Arabia.

Who is behind the fund?

The council was set up by the two governments to bring private businesses on both sides together, and it is chaired by Prince Mansour bin Mohammad Al Saud. He led a Saudi business delegation that called on Prime Minister Shehbaz Sharif in August and came back to Pakistan in October to meet political leaders, officials and chambers of commerce, the Foreign Office said at the time.

At the August meeting, Shehbaz said Pakistan wanted to turn its economic ties with Saudi Arabia into a “strategic economic partnership”. The sectors raised then included agriculture, ports, highways, airports, real estate, energy, power distribution and IT, Pakistan Observer reported.

The council has not yet named a fund manager, a final size or the first companies it will back.

Why it matters for Pakistan

Most Saudi money that reaches Pakistan comes as government help: central bank deposits, deferred oil payments and loan rollovers that keep reserves afloat. A private equity fund works differently. It buys stakes in private companies and expects a return, which means jobs and expansion if the deals happen, and no new government debt.

The size needs perspective. A few hundred million dollars is modest next to the multi-billion investment pledges announced with Gulf partners in recent years. The real test is the first deals: which sectors, which companies, and how quickly money moves from announcement to cheques.

The launch also fits a wider pattern: Islamabad and Riyadh have been drawing closer, especially on defence, as the months-long US-Iran conflict drags on.

What to watch

Look for the fund’s first named investments and its manager. For businesses, the council’s earlier list (farming, logistics, energy, real estate and IT) is the best guide to where the money is likely to go first.

This is information, not investment advice.