Saudi Arabia’s endowment investment funds are experiencing remarkable growth, as the General Authority of Awqaf reports a surge in the number of licensed funds, which has now reached a total of 24 in 2023, marking an increase of 13 from the previous year. This expansion has propelled the net assets of these endowment investment funds in the Kingdom beyond the significant milestone of SR500 million ($133 million) for the current year. This development aligns with the government’s strategic objectives to bolster the financial sector and streamline the licensing processes for various financial products, creating an encouraging environment for both individuals and entities to further engage in various aspects of endowment investment across the nation. These endowment funds are uniquely positioned to contribute to sustainable development and best practices, participating in projects that cater to society’s evolving needs while prioritizing high returns on their endowed amounts.
Notably, leading fund managers in this space, such as Al Rajhi and Alinma Investment, oversee numerous funds focused on a range of causes, from Quran memorization to health associations. Furthermore, recent agreements signed with the Council of Non-governmental Organizations indicate the potential for continued growth in the sector, with the launch of five investment endowment funds worth SR186 million in the first quarter of 2023. These funds aim to bolster financial sustainability for non-governmental organizations and enhance their developmental role. Nonetheless, discussions with the Capital Market Authority highlight ongoing challenges faced by these funds, including limited diversification of investments primarily focused on the real estate sector, which can increase risks. As a public authority, the General Authority of Awqaf’s mission remains to enhance the role of endowments in economic and social development, as well as promote social solidarity in Saudi Arabia.