Rothschild latest in growing list of international firms setting up in Saudi Arabia
Saudi government seeking to encourage firms to relocate or establish their regional headquarters in the country
MENA LPs say lack of local sales teams main barrier to investment with overseas GPs
February 26, 2024 (Preqin News) – Investment bank Rothschild & Co Global Advisory is establishing a presence in Saudi Arabia by opening a new office in Riyadh, making it the latest international firm to settle in the Kingdom.
Rothschild said the new office in the King Abdullah Financial District will allow the firm to offer advisory services and insights for M&A, debt advisory, restructuring, and equity markets.
‘The opening of our Riyadh office is a significant milestone in our ongoing efforts to expand our regional footprint in critical markets. Saudi Arabia represents a fundamental pillar of our Middle East strategy,’ Saeed Al Awar, Partner and Head of the Middle East at Rothschild & Co, said in an announcement.
The Kingdom of Saudi Arabia has signaled its intent to attract greater capital and expertise to the country, as it looks to develop its non-oil economy under Vision 2030. As part of the strategy, it is seeking to encourage international firms to establish or relocate their regional headquarters in the country.
Canada-headquartered Brookfield opened an office in Saudi Arabia in late 2022, moving Managing Director Aanandjit Sunderaj – who has worked at the firm since 2012 in Mumbai, Singapore, and Dubai – to Riyadh to head up the office. Asset management firm Franklin Templeton recruited Muneera Al-Dossary in October last year to lead an expansion into Saudi Arabia.
Singapore-headquartered Golden Gate Ventures opened an office in Riyadh, its first in the MENA region, last December. The firm said it was looking to capitalize on increased cooperation between Singapore and MENA, following the ‘strategic partnership’ agreement between the Saudi and Singapore governments in October 2023.
Earlier in the year, TVM Capital Healthcare, a MENA and Southeast Asia-focused venture capital fund, established an office in Riyadh, its second in MENA after Dubai. Bahrain-based Arcapita set up in Riyadh in October 2022 to participate in private equity and real estate investments in the country.
According to law firm Dentons, 180 companies had applied for licenses under the regional headquarters program by December 2023.
In addition to investment firms, companies that provide services to GPs have also established or expanded their presence in Saudi Arabia. Several international law firms, including Kirkland & Ellis, Simmons & Simmons, Norton Rose Fullbright, CMS, King & Spalding (law), and Hogan Lovells have set up operations in the Kingdom over the past two years.
Professional services firm Alvarez and Marsal announced the establishment of new Riyadh and Abu Dhabi offices in August 2022, while advisory firm FTI Consulting announced on Monday that it has been issued a Regional Headquarters License from the Ministry of Investment.
Establishing a physical presence and building relationships in the Middle East is key to conducting business there. In a survey for Fundraising from the Middle East: A Guide to Raising Capital, published by Preqin in 2022, 50% of LPs said that having ‘no local sales team’ was the most common mistake international GPs made when trying to raise funds in the region.
‘This is a strong signal that if managers are serious about raising in the Middle East, a footprint is required,’ said Alex Murray, Head of Real Assets at Research Insights, Preqin.
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