New York-based merchant bank Z Capital Group (ZCG) has partnered with Zahrat Al Amaal Holding Company, an investment firm founded by Saudi billionaire property developer Fawaz Abdulaziz Alhokair, to finance high-growth SMEs in Saudi Arabia.
The joint venture, set to be operational by the end of 2024, will directly source and originate senior secured and asset-based loans.
The strategic partnership will utilise Alhokair’s local network, market insight and investment pipeline, combined with ZCG’s asset management, in-house consulting, and innovative proprietary technology solutions, the firms said.
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They will seek to invest in companies with resilient business models, highly predictable cash flows, high-quality management teams, and strong growth.
“As a global investor with a deep track record and unique experience, we share Fawaz Alhokair’s conviction in the long-term growth opportunities for SMEs, and look forward to our joint venture delivering a new private capital solution for high-growth businesses in Saudi Arabia,” said James Zenni, founder, president, and chief executive of ZCG. “Bringing together ZCG’s global investment, consulting, and technological expertise with Fawaz Alhokair’s excellent reputation, network, and market insight to support the businesses propelling economic development within the region, we can deliver on our investment return and economic development goals.”
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Alhokair said: “We welcome our partnership with ZCG, one of the leading U.S. private equity firms with an over 25-year track record in private debt. In line with Vision 2030 and the government’s objective to increase access to capital for local SMEs, we believe in the success of such a venture. Leveraging our local capabilities, extensive network, and market insights, coupled with ZCG’s technology and proven track record in managing such business, we anticipate a mutually beneficial collaboration.”
Investors are increasingly seeing the opportunities presented by Saudi Arabia’s private credit market.
Last November, Saudi Arabia’s state-backed Jada Fund of Funds announced its first foray in the private credit space, with a $250m (£197.5m) investment in private credit firm Ruya Partners.
