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StanChart makes first foray into Saudi

Standard Chartered's first Saudi private equity deal is for a minority stake in the country's largest building materials manufacturer.

Standard Chartered's private equity arm, Standard Chartered Private Equity (SCPE), has sealed its first investment in Saudi Arabia with the acquisition of a minority stake in building materials group Construction Products for $75 million.

The company is Saudi’s largest building materials manufacturer, according to SCPE, and is part of the Saudi Bin Laden Group.

Despite Saudi Arabia being widely regarded as one of the Middle East and North Africa’s most promising markets – a PEI white paper on the MENA region found it the third most attractive economy to LPs, just behind Egypt and Turkey – private equity firms have yet to put significant amounts of capital to work there. 

Saudi Arabia is the region’s largest country and economy, and its regulators are endeavouring to attract foreign investment. 

US-listed alternative asset manager KKR, for example, recently won approval from the Saudi regulatory authorities to target the country’s investors directly, without the need for a registered third party intermediary.   

The Construction Products deal is the latest in a string of investments SCPE has made in emerging markets in recent months.

In July, it acquired a 49 percent stake in Korean crane-maker Doosan Industrial for an undisclosed sum. It followed that up several days later with a $98 million investment in IT company Redington India. Less than a week after the Redington deal was made public,  SCPE, together with Build India Capital Advisors and funds managed by Indian financial services group JM Financial, invested $131 million in GMR Airports for an undisclosed stake.