US-Based I Squared To Deploy Up To $2B Across Saudi PIF’s Real Estate And Infrastructure Assets

Saudi Arabia's Public Investment Fund (PIF) has signed a memorandum of understanding with I Squared Capital, under which the US-based infrastructure investment manager will invest up to $2 billion in real estate and infrastructure assets owned by PIF.Targeting Saudi infrastructure I Squared will target up to $1 billion each in digital infrastructure and district cooling, with the option to scale across related business themes, PIF said in a statement on Monday.District cooling plants deliver chilled water through insulated pipes to cool offices, industrial facilities, and residential buildings.The agreement comes more than a year after the two institutions agreed to establish a dedicated infrastructure investment strategy focused on the Middle East."I Squared's expanding partnership with PIF reflects the confidence and trust that has developed between the two institutions," said Sadek Wahba, chairman and managing partner of I Squared Capital, adding that the MoU marked a move "from partnership to action."PIF's unit King Abdullah Financial District was seeking to sell its district cooling assets for more than $500 million, Reuters reported in March, citing two sources. I Squared is no stranger to digital assets either, having acquired approximately 10 US data center facilities from Cogent Fiber in May.The MoU is non-binding, and any transactions that follow will be subject to further assessment by both parties and regulatory approvals.PIF pushes for third-party capital The deal fits PIF's 2026-2030 strategic objectives to partner with global investors on opportunities within its portfolio and increase the contribution of third-party capital across its pipeline of real estate and infrastructure projects.Saudi investors are separately preparing to launch a private equity fund designed to attract foreign investment into the kingdom, targeting controlling stakes in sectors including healthcare, logistics, cold storage and data centers. The fund's backers say international appetite for Saudi Arabia remains strong, but overseas investors are more likely to commit capital alongside blue-chip Saudi partners that can source, structure and manage deals.PIF spending cuts The $1 trillion sovereign wealth fund is seeking to broaden the sources of capital backing Saudi Arabia's Vision 2030 program amid tighter public finances and lower oil revenues. PIF, which has financed many of the kingdom's giga-projects, has been scaling back spending since 2024, with some project budgets cut by as much as 60%.The fund is expected to cut capital expenditure by about 15% this year while continuing to prioritize time-sensitive investments linked to the 2030 World Expo and the 2034 FIFA World Cup. Foreign direct investment has also remained below official ambitions as state funding becomes more selective.Big numbersLast month, PIF said its profit after tax rose 150% year on year to $17.3 billion (SAR 65 billion) in 2025, with net assets up nearly 5% annually to $1.2 trillion (SAR 4.5 trillion).