Saudi SVC redirects $3bn to private credit and equity growth

Saudi Venture Capital (SVC) is reworking its investment playbook, shifting a larger slice of its $3bn mandate into private credit and equity as Riyadh seeks deeper, non-bank financing channels. The change — disclosed by CEO Nabeel Koshak — is designed to plug funding gaps for smaller firms and accelerate alternatives to traditional bank lending across the Kingdom.

Under the revised approach SVC, which operates mainly as a fund-of-funds, plans to allocate roughly 50% of its portfolio to private credit and equity, up from about a third last year. The balance will continue to support venture capital and early-stage initiatives. Management says the fund will keep its deployment cadence after averaging around $300m a year over the prior two years and maintaining similar activity through 2026 toward its 2030 $3bn target.

The move reflects a broader regional trend: private credit pools have expanded as banks retrench from certain SME lending amid tighter liquidity and regulatory shifts. Globally, private credit assets under management have grown substantially in the last decade — estimated at more than $1.5tn industry-wide — and Gulf institutions are increasingly eyeing that segment for both yield and diversification.

SVC has already taken initial positions in the space, backing vehicles such as Partners for Growth and Ruya Partners, while continuing commitments to established managers including General Atlantic and Global Ventures. Those allocations blend direct private-credit exposure with continued support for buyout and growth-equity strategies, a hybrid approach aimed at balancing income generation with long-term capital appreciation.

From a market perspective, expanding private credit in the Kingdom could ease financing stress for SMEs that struggle with traditional bank covenants and collateral requirements.