The deepening U.S.–Saudi relationship — underscored by successive investment summits in Riyadh and Washington and growing collaboration across artificial intelligence, infrastructure, and energy transition — has moved the kingdom from peripheral to strategic, said Faisal Baig, the chief investment officer at Asfar (Saudi Tourism Investment Company), a subsidiary of Public Investment Fund (PIF), in an exclusive interview with Markets Group.
Under the Trump administration, Saudi Arabia has been positioning itself as both a capital partner and a growth market, partnering with established U.S. corporate leaders and strategic allocators. That shift is reflected in a string of high-profile sovereign plays, including the $55B agreement to take Electronic Arts private in partnership with Silver Lake and Jared Kushner’s Affinity Partners, underscoring the PIF’s willingness to co-invest big with U.S. linked funds, according to a press release by PIF.
Add to that the fact that Saudi Arabia recently outlined a bold future through its Vision 2030 goals, which aim to make the country a global leader by 2030, according to Praxis.
Yet the optimism masks real challenges: according to the U.S. 2025 Investment Climate Statement, foreign investors continue to grapple with evolving legal frameworks, regulatory complexity, and comparatively shallow exit markets, all of which can slow or complicate private equity deployment, according to a U.S. State Department 2025 report.
When it comes to investing in Saudi Arabia, Baig highlighted food and beverage, healthcare, and hospitality as key areas to watch. He believes sustained demographic tailwinds and domestic demand can translate to resilient businesses that scale. For hospitality, Baig sees under-built mid-market hotel segments as ripe for operators that can improve service quality and capture both regional and international visitor flows. Indeed, Saudi Arabia’s tourism engine — projected to grow around 8% in 2025 with record visitor spending and hotel room pipelines expanding toward hundreds of thousands of keys by 2030 — underscores why hospitality is gaining traction, noted reporting by Arab News.
The kingdom’s food and beverage industry stands out as a sector where centralized kitchen models and casual dining chains can convert scale into margin expansion, while healthcare — notably specialty outpatient platforms — may find demand as private options expand alongside state services.
Still, he cautioned that the market remains fundamentally different from the U.S. or Europe, particularly for private capital. Risks remain, particularly for investors without local intelligence. “Flying in, transacting and flying out is just not going to work,” said Baig. “Saudi is extremely relationship-driven.”
Partner selection, he added, is the single most important underwriting decision. Capability in the relevant sector, financial stability and local reputation must be validated in person, not through standard U.S.-style diligence. “This is not a desktop exercise,” Baig said.
Once that foundation is in place, Baig sees the most consistent opportunity in mid-market private equity, particularly equity checks of $50M to $200M. Large-cap buyouts are rare, and Saudi has yet to reach the the depth of secondary transactions to support repeat billion-dollar deals like in mature markets.
He shared the example of Riyadh’s rapid real estate rent inflation — recently addressed through a five-year rent freeze in the capital — and how a foreign investor could benefit from knowing about similar changes being planned for other sectors. “These are things that don’t show up in a financial diligence report,” Baig said. “A good local partner will surface them early.”
