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Brazilian alternative asset giant Patria Investments is exploring potential investments in the Kingdom along with its portfolio companies, CEO Alexandre Saigh told Bloomberg. At least three of Patria’s companies, including gym club operator Smartfit and acai maker Frooty, are looking to expand to the local market, Saigh said.
A reciprocal arrangement: Patria — one of the leading asset managers in Latin America — is also looking to purchase fertilizers from Saudi on top of bitumen it already imports for a highway project in Brazil that it is working on with the Public Investment Fund (PIF), Saigh said. He did not provide details on the ongoing cooperation with the PIF.
The Saudi pitch: “We see Saudi Arabia as a country to expand in. A very interesting place with a young population and rising middle class — a lot of [potential],” Saigh said.
Patria sees value in Vision 2030: Brazil could play a key role in Vision 2030, allowing the Kingdom to boost its efforts for diversification, mining, green energy and food security, Saigh told the business information service. Both nations list one another as top 20 trading partners, with c. USD 7 bn of inflows last year, according to data compiled by Bloomberg. This figure could grow further to reach USD 10 bn by 2030 as Saudi focuses on some of its booming non-oil industries, including tourism and hospitality as it brings in more imports from Brazil, according to Gulf Research Center.
REMEMBER- Saudi and Brazil have been cozying up since a key visit by Brazilian President Luiz Inacio Lula da Silva to the Kingdom in November for talks focused on strengthening bilateral ties. Earlier this year, some 150 local and Brazilian investors took part in the Saudi-Brazilian Business Forum to mull potential investments between the two countries. Earlier this month, Brazilian private equity firm EB Capital Gestao de Recursos said it is seeking USD 300 mn from Saudi investors to launch a USD 600 mn fund with a launch set by 3Q 2024. The two countries also inked an MoU recently to cooperate on developing and localizing defense technologies.
More to come? Rio de Janeiro is hosting this week the PIF-backed FII Institute’s first Latin America-focused investment conference as officials from both countries look to deepen ties. Dubbed FII Priority Rio de Janeiro 2024, the event will bring together Brazil’s Lula and PIF boss Yasir Al Rumayyan along other Saudi and Brazilian officials. The event — which wraps up tomorrow — will also see the participation of several leading Brazilian firms, including miner Vale, meat processor JBS and digital banking platform Nu Holdings, according to Bloomberg. The last such event was held in February 2024 in Miami, while the Asia iteration was held in Hong Kong in December 2023.
Some of these are familiar faces: Manara Minerals — a JV between Saudi Arabian Mining (Ma’aden) and the PIF set up for international mining investment — completed last month the acquisition of a minority stake in Brazilian miner Vale Base Metals. The transaction is worth an estimated USD 2.6 bn. Brazilian planemaker Embraer has also partnered with the Kingdom to help develop its aerospace industry, hoping to secure the sale of 33 planes to Saudi, according to local Brazilian media.
And more is coming in the pipeline: Brazil’s BRF — one of the world’s largest poultry suppliers — is planning a new plant in Saudi that could see the Kingdom produce chicken locally for the first time, the business information service reported, citing sources it says are of the know. The plans come nearly a year after PIF-owned Saudi Agricultural and Livestock Investment Company (Salic) acquired a 10.7% stake in BRF.
What the pundits are saying: Deeper ties between Saudi and Brazil “is born of a desire to increase the relevance of the Global South and position it as a counterweight to the traditional dominance by the US and West,” Goldman Sachs economist Farouk Soussa told Bloomberg. “Brazil has many industries complimentary to Saudi Arabia,” he said. “It can be a key ally in food security and metals.”
