Saudi Equity Growth Traded Fund targets raising SAR 300 mln by floating 30 mln units on Nomu

The fund targets raising SAR 300 million by offering 30 million units at SAR 10 each in the initial offering.

The offered units will be limited to qualified investors as defined in the glossary used in CMA's regulations and rules.  

The fund aims to achieve growth and capital gains in the short, medium and long terms. This is by investing actively in the shares of private equity companies that are suitable for listing or floating on the Saudi or any other market, or exiting them through a secondary sale (selling the company’s stake to another company or party).

In the absence of a suitable opportunity, the fund manager shall actively invest in other assets such as shares of listed companies. This could be through initial public offerings (IPOs) and capital market instruments, including units of Shariah-compliant capital market funds.

The fund manager defined the types of securities in which it intends to invest in, namely:

Shares of private companies that are suitable for listing or floating on the Saudi or any other market, or exiting from them through a secondary sale (selling the company’s stake to another company or party), besides being Shariah compliant.

Shares of listed companies on the Saudi Exchange (Tadawul) or Nomu, including initial subscriptions (and subscriptions issued by the fund manager or investment advisor), which are compliant with Shariah regulations.

Capital market instruments which are invested in either directly or through Shariah-complaint investment funds licensed by the CMA (including funds managed by the fund manager or investment advisor).

The fund's strategy is to achieve an absolute return primarily from investing in shares of private companies and there will be no restrictions on exposure to a particular sector.

Geographically, the fund's concentration percentage will range from 75-100% as a minimum of the fund's net asset value towards the Kingdom of Saudi Arabia. Meanwhile, the percentage of countries outside the Kingdom will not exceed 25% of the net asset value.

*In normal circumstances, the fund manager will not retain cash liquidity and money market instruments/funds at a rate not exceeding 50% of the fund's net asset value. In the event of liquidating some investments (and until cash liquidity is re-invested) or in fund commencement or others, the allocated percentage may increase to up to 100% of the fund's net asset value.

The fund may also invest primarily in the shares of private companies that aim to be listed or floated on the Saudi or any other market, or exit from them through a secondary sale. It shall not be subject to any concentration in globally-listed securities (except for Saudi Arabia), unless their purpose is to exit from its current investment in private companies.

In the case of shares of listed companies, the fund will invest only in Tadawul and Nomu. This in addition to tapping shares of private companies in foreign markets after a period not exceeding six months from the fund’s listing on Nomu.