As Saudi Arabia accelerates efforts to deepen its capital markets and attract global capital, public investment funds are increasingly emerging as a barometer of investor confidence in the Kingdom’s financial transformation.

Assets held by public investment funds in Saudi Arabia rose to $58.1 billion by the end of the third quarter of 2025, marking a 36% year-on-year increase, according to official data. The growth was driven primarily by stronger domestic investment flows, underscoring the expanding role of local capital in shaping the market’s evolution.

Data from the Capital Market Authority, cited by the Saudi Press Agency, also show assets increasing 5.7% quarter-on-quarter, signalling sustained momentum despite ongoing global market volatility. In recent years, Saudi Arabia’s stock exchange has recorded solid growth, supported by rising investor appetite for fixed-income instruments amid a prolonged period of elevated global interest rates.

Investor participation continued to build. By the end of the third quarter, the number of subscribers to public investment funds reached 1.59 million, representing a 1.5% annual increase, according to SPA. The steady rise points to deeper engagement from both retail and institutional investors across the Kingdom’s investment ecosystem.

Local funds were the primary driver of expansion, with assets climbing 39% year-on-year to $49.8 billion. These funds accounted for 86% of total public investment fund assets in the third quarter. Assets held in foreign funds also increased, rising 21% annually to $8.3 billion, reflecting growing diversification and cross-border exposure.

The number of public investment funds operating in Saudi Arabia expanded by 11.6% year-on-year to 346, up from 310 in the same period last year. Assets were spread across equities, bonds, cash instruments, real estate, and other asset classes. Local money market funds held the largest share at $20.2 billion, followed by local equities at $12.4 billion and real estate investment funds at $7.7 billion.

Looking ahead, the Kingdom is pressing ahead with market reforms. Earlier this month, Saudi Arabia announced plans to open its financial markets to all foreign investors. Measures introduced by the Capital Market Authority include removing the Qualified Foreign Investor framework, which required a minimum of $500 million in assets under management, and abolishing swap agreements—steps aimed at improving market accessibility, liquidity, and long-term competitiveness.