American investment banking giant Goldman Sachs is in talks with the Kuwait Investment Authority (KIA) to secure a USD 10 billion investment mandate, as the Wall Street firm continues to expand into private markets and build its presence in the Middle East.
According to Bloomberg reports, the funds will be spread over multiple years through Goldman’s private equity, credit, and infrastructure vehicles. Discussions are ongoing, and it is unclear when and how the full commitment will be finalised.
The potential deal comes after Goldman opened an office in Kuwait City earlier in October, in the presence of Chief Executive David Solomon and Global Head of Asset and Wealth Management Marc Nachmann, as part of the firm’s broader regional expansion, with offices already in Abu Dhabi and Riyadh.
Goldman has USD 374 billion in private assets under management. The USD 10 billion will represent a small percentage of the roughly USD 1 trillion total portfolio at KIA, but it would be a significant victory for Goldman in its pursuit of Gulf sovereign capital, as it competes with private market titans Blackstone, KKR, and Apollo Global Management for sovereign capital.
The expansion also places Goldman on a list of international managers, including Carlyle Group, Franklin Templeton, and State Street, that have set up offices in Kuwait to deepen ties with one of the world’s oldest and largest sovereign wealth funds.
If successful, the mandate would highlight Goldman’s increasing emphasis on private market strategies as a source of long-term growth, as well as its desire to secure a larger slice of the Gulf’s sovereign wealth allocations.
In addition to its bet on Kuwait, Goldman also launched its onshore Private Wealth Management services in Riyadh in October, a move that will enhance the capabilities of the company’s operations in Saudi Arabia. The new unit will employ its “One Goldman Sachs” strategy by collaborating with the region’s asset management, global banking, and markets teams.
On its prospects in the Kingdom, Goldman Sachs EMEA Private Wealth Management co-head Rob Mullane said, “We are delighted to expand our commitment to Saudi Arabia by launching an onshore presence in Riyadh. Saudi Arabia has an exceptionally dynamic economy and a highly sophisticated investor base. We aim to deliver access for regional clients to Goldman Sachs’ leading Private Wealth Management business, opening up local and global investment opportunities and contributing to the local financial industry.”
Goldman Sachs sees Saudi Arabia as presenting substantial opportunities for its business, given the country’s concentration of ultra-high-net-worth individuals and economic diversification.
The firm will offer a range of investment options across public and private asset classes to meet client needs, and to support this expansion, it has appointed Yousef Alhozaimy and Khalid Soufi as private wealth advisors based in Riyadh. The firm is also recruiting additional private wealth advisors and other roles to strengthen its regional presence.