Saudi Arabia's Public Investment Fund (PIF), the kingdom's sovereign wealth fund, set up a 4 billion Saudi riyal fund (US$1bn) that will provide small and medium-sized enterprises (SMEs) access to capital.
The "Fund of Funds", as it is known, will invest in venture capital and private equity funds targeting the SME sector, PIF said in a statement.
"The Fund is aligned with the Vision 2030 objective of facilitating private sector growth and supporting the development of SMEs in creating job opportunities, promoting innovation, and increasing exports as per the commercial by-laws, to support and encourage investment in SMEs," PIF said.
The estimated contribution of the fund to the kingdom's gross domestic product is 400 million riyals by the end of 2020, and it will create more than 2,600 jobs. The contribution to GDP is set to rise to 8.6bn riyals by the end of 2027, creating around 58,000 jobs.
PIF is earmarked to become a $2 trillion fund with the anticipated listing of Saudi Aramco that may raise as much as $100bn from a 5 per cent stake in the world's largest energy company.
PIF, established in 1971, has in its portfolio investments across various asset classes with stakes in Uber, STC, the e-commerce platform Noon that launched last month, Sabic, Maaden, Taqnia, Savola, Americana, among other entities. It has also co-invested in a technology fund with Japan's Softbank Group.