The Middle Eastern consortium is back in China as a limited partner.

There is new news about the financial backers from the Middle East.

Recently, Zhonglian Investment announced that it had signed a cooperation agreement for an equity investment fund worth $300 million with Ajlan Global. It is reported that Zhonglian Investment will act as the fund manager, and the fund will focus on investing in cutting - edge technology fields such as global artificial intelligence, new energy, and pan - semiconductors.

Although Ajlan doesn't attract as much attention in the primary market as various Saudi sovereign funds, it has a remarkable background. Ajlan Global Group is one of the largest private enterprises in Saudi Arabia, with its business covering multiple fields such as textile and clothing, real estate development, industry, petrochemicals, healthcare, technology, artificial intelligence, and food. In 2024, the Ajlan brothers ranked 32nd on Forbes' list of the "Top 100 Most Influential Arab Family - owned Businesses".

It is worth mentioning that Ajlan was also one of the earliest Saudi private enterprises to enter China. As early as 2002, it established its first factory in China in Jiangsu. Now, the group has become the largest Saudi private enterprise in China.

Previously, Ajlan's investments in China mainly involved strategic cooperation with enterprises or the establishment of joint - ventures, and it rarely participated in fund - setting as a limited partner (LP). This cooperation with Zhonglian Investment is equivalent to a new attempt in its investment strategy in China. This is undoubtedly good news for VC/PE firms facing the "fund - raising difficulty" - it means that the market will welcome another powerful buyer with substantial funds and in - depth knowledge of the Chinese market.

An Old Saudi "Friend" in China

The story of Ajlan began in 1979 when Ajlan Al - Ajlan founded the company with three brothers. It initially started in the clothing and textile industry, opening its first men's accessory store in Riyadh, the capital of Saudi Arabia.

Later, under the leadership of the Ajlan brothers' family, after more than 40 years of development, the company's business has expanded from clothing and textiles to multiple fields such as real estate development, industry, infrastructure, food and beverage, and fintech. Now, Ajlan Global Group has companies in more than 25 countries and regions around the world, with a total of over 15,000 employees, becoming one of the largest business groups in the Kingdom of Saudi Arabia.

The cooperation between Ajlan Global Group and China can be traced back to the early 1990s, when it was the early days of the establishment of diplomatic relations between Saudi Arabia and China. The clothing and textile industry was an advantageous area for economic and trade cooperation between the two countries. With its profound background in the textile industry, Ajlan quickly spotted the business opportunities and officially entered the Chinese market in 2000.

In 2002, the Ajlan brothers' family established its first factory in China - Suzhou Danlong Textile Co., Ltd. One year later, the family also established Haizhijie Textile Co., Ltd. (hereinafter referred to as "Haizhijie") in Zaozhuang, Shandong, mainly producing and selling traditional Saudi clothing such as thobes and headscarves. In the following more than a decade, the Ajlan brothers' family continuously expanded its clothing industry layout in China, spanning multiple provinces and regions such as Jiangsu, Shandong, and Xinjiang, and established more than ten factories.

Now, Haizhijie has developed into an enterprise with integrated manufacturing facilities covering yarn, fabric, clothing, headscarves, and packaging and printing. It is the largest exporter in Zaozhuang. During the COVID - 19 pandemic in 2020, its total export volume exceeded the $100 million mark against the trend.

2017 was a crucial turning point in Ajlan's development. Driven by the "Saudi Vision 2030", the Ajlan brothers' family established the "Ajlan Brothers Holding Group" in Saudi Arabia and successively set up investment offices in Shanghai, Beijing, and Shenzhen. The investment fields have also expanded from clothing and textiles to multiple industries such as logistics, gaming, artificial intelligence, and medical technology.

In terms of investment strategy, different from general equity investment, Ajlan mainly looks for leading enterprises in niche industries and then takes them to Saudi Arabia to establish joint - ventures. In this process, Ajlan not only provides financial support but also participates in every step, including company registration, team building, resource connection, and customer expansion.

A typical case is the cooperation with Chint Electric. In 2022, Ajlan Brothers Holding Group and Chint Electric announced the establishment of a joint - venture in Saudi Arabia. With Ajlan's help, Chint Electric quickly completed the factory site selection and obtained the operating license, successfully launching a localized production project for low - voltage power devices.

Also at the China - Saudi Arabia Summit in 2022, the Ajlan brothers signed agreements worth nearly 60 billion yuan with more than a dozen Chinese enterprises. The investment fields cover infrastructure, cloud computing, artificial intelligence, medical technology, and other industries.

As of now, Ajlan has become the largest Saudi private enterprise investing in China. Well - known domestic enterprises such as Tencent, SF Express, Chifeng Gold, Northern Mining, Fourth Paradigm, XianTu Intelligence, and Industrial and Commercial Bank of China have all had cooperation with it.

Another notable development regarding Ajlan is that in 2023, it signed a memorandum of cooperation with Shenzhen Capital Group to jointly explore investment opportunities in the Guangdong - Hong Kong - Macao Greater Bay Area, the Middle East, North Africa, and even the world. Considering this cooperation with Zhonglian Investment to set up a fund, we might as well look forward to this "old Saudi friend" in China participating more deeply in China's primary market investment as an LP.

And this is undoubtedly good news for Chinese VC/PE firms suffering from the "fund - raising difficulty".

VC/PE Fund - Raising Sets Sights on Middle Eastern Tycoons

Of course, the "Middle East fever" in the domestic primary market is not something new.

Since 2022, there has been a wave in the domestic venture capital circle to "seek funds" in the Middle East. Institutions such as GGV Capital, Mingshi Capital, Shenzhen Capital Group, and Tongchuang Weiye have led their institutions and invested enterprises to visit Saudi Arabia, meeting with local sovereign funds, royal family offices, and industrial capital.

In 2023, various service institutions emerged in the market, specifically leading enterprises and institutions with financing and fund - raising needs to visit the Middle East. At the end of 2024, two well - known domestic PE firms, Hillhouse Capital and CPE Yuanfeng, planned to set up offices in the Abu Dhabi Global Market.

As domestic institutions "head west", Saudi capital has also accelerated its layout in the Chinese market. Public data shows that in 2024, the investment from Middle Eastern countries in China reached a record high, exceeding $9 billion, covering multiple fields such as energy, infrastructure, high - tech, financial services, and real estate.

Entering 2025, the "Middle East fever" in the domestic primary market continues. An obvious sign is the resurgence of US - dollar funds.

Recently, several institutions, including Lightspeed China Partners, Liss Capital, Black Ant Capital, and Yingze Capital, are raising a new round of US - dollar funds, with a total amount exceeding $2 billion. This is regarded by the market as an important signal that global capital is re - evaluating the Chinese market.

My colleague, Teacher Riemann, mentioned in the article "Are US - Dollar Funds Making a Comeback?" that behind this wave of US - dollar fund resurgence, there are also structural changes in their survival rules, including the replacement of LPs - Middle Eastern funds are becoming the new major source of US - dollar fund - raising.

Coincidentally, a headhunter friend recently told me that several US - dollar funds are actively recruiting for IR positions. Many of them clearly require candidates to have connections in the Middle East, especially direct business experience with government funds, sovereign funds, and family offices, and regard "proficient in Arabic" as an advantage in recruitment.

On one hand, there is a strong demand from domestic investors to "seek funds", and on the other hand, Saudi financial backers are becoming increasingly interested in the Chinese market. It is foreseeable that in the future, the story of Middle Eastern capital in China's primary market will continue.

This article is from the WeChat official account "LP Spectrum", author: Wang Manhua. Republished by 36Kr with permission.