King Street Capital Management, the $28.5bn alternative investment firm, is seeking a license to operate in Saudi Arabia as investment firms increasingly target the kingdom’s deepening capital markets and vast economic transformation under Vision 2030, according to a report by Bloomberg.
The report cites unnamed sources familiar with the matter as revealing that King Street has applied to the Saudi Capital Market Authority (CMA) for regulatory approval that would allow it to manage client assets locally. The firm, known for its credit, real estate, CLO, and hedge fund strategies, is aiming to expand its regional footprint beyond its existing base in Dubai.
This follows King Street’s signing of a memorandum of understanding last year with the Saudi Real Estate Refinance Company (SRC) – a unit of the $940bn Public Investment Fund (PIF) – to facilitate mortgage securitisation and attract foreign investment into Saudi housing markets. The move aligns with Saudi Arabia’s effort to diversify its economy and deepen its capital markets as part of the government’s $2tn economic overhaul.
Saudi Arabia has been stepping up efforts to encourage international financial institutions, including hedge funds, to set up onshore operations. In 2024, Goldman Sachs became the first Wall Street bank to receive a regional headquarters license in the kingdom, while BlackRock secured up to $5bn from PIF to build a Riyadh-based team and invest across the region.
For hedge funds like King Street, establishing a presence in Riyadh may become increasingly critical as the government pushes for localisation of financial services and hints at limiting access to public sector business for firms without local operations.
The firm’s Middle East operations are currently led by Reda Zebdi, based in Dubai. The emirate, along with Abu Dhabi, has attracted a wave of global hedge funds in recent years – including Brevan Howard and Andurand Capital – with over 70 hedge funds now based in the Dubai International Financial Centre, most of which manage over $1bn in assets.
