BlackRock and Saudi Arabia’s sovereign wealth fund Public Investment Fund (PIF) have signed a non-binding memorandum of understanding (MoU) to launch a multi-asset class investment platform in Riyadh, Saudi Arabia.

Dubbed BlackRock Riyadh Investment Management (BRIM), the new platform will be anchored by an initial investment mandate of up to $5bn from PIF.

According to the parties, additional funds for the initiative will be secured from local and international investors.

The new platform will include investment strategies across a range of asset classes. All of these are expected to be overseen by a Riyadh-based portfolio management team and supported by BlackRock’s global asset management platform.

PIF MENA investments deputy governor and head Yazeed A. Al-Humied said: “PIF’s relationship with BlackRock is well established and growing. Partnering with leading global international companies and asset managers like BlackRock is part of PIF’s growth strategy.

“This new landmark agreement represents a step forward in PIF’s work in making the Saudi investment and asset management market more internationally diverse and more dynamic.”

BlackRock Riyadh Investment Management is expected to support foreign institutional investment into Saudi Arabia as well as advance the Saudi asset management sector.

Besides, the new multi-asset class investment platform will expand local capital markets along with fostering investor diversification across asset classes.

Furthermore, BlackRock Riyadh Investment Management will invest in facilitating infrastructure and investment research capabilities. This is aimed at improving local insights by recruiting locally and relocating experienced investment professionals.

BlackRock chairman and CEO Larry Fink said: “We are excited to build on the deep partnership we have developed with PIF over many years to launch this first-of-its-kind international investment management platform in Saudi Arabia.

“The continued growth of the Kingdom’s capital markets and diversification of its financial sector will contribute to future prosperity for its citizens, the competitiveness of its companies and the resilience of its economy.”

The MoU is contingent upon certain necessary conditions, regulatory approvals, and fulfilling of specified milestones.