Asset manager BlackRock will launch an investment platform in Riyadh with the help of a $5 billion anchor investment from Saudi Arabia’s Public Investment Fund, the kingdom’s sovereign wealth fund.

The announcement Tuesday followed the signing of a memorandum of understanding between BlackRock’s Saudi division and the PIF with the aim of spurring capital markets growth in the oil-rich Gulf country.

BlackRock, the world’s largest asset manager with $10 trillion in assets under management, will “launch investment strategies across asset classes for the Saudi market, including both public and private markets, managed by a Riyadh-based investment team,” a joint press release from the firm and the PIF read.

The new platform will be called BlackRock Riyadh Investment Management, or BRIM.

BRIM aims to help bring foreign institutional investment into Saudi Arabia as well as develop the Saudi asset management industry, expand local capital markets and investor diversification, and support the development of the kingdom’s asset management talent, the release said.

The initiative, as well as many others by the PIF, which oversees $925 billion in assets under management, contributes to Saudi Arabia’s Vision 2030, a multitrillion-dollar project aiming to modernize the kingdom’s economy and diversify it away from oil. Central to that effort is bringing major international institutions, investment and foreign talent into Saudi Arabia itself.

The establishment of BRIM aims to foster “further growth in the Saudi capital market ecosystem and enable a growing international investment management sector based in Saudi Arabia,” the press statement said.

Larry Fink, CEO of BlackRock, said in the statement that the kingdom “has become an increasingly attractive destination for international investment as Vision 2030 comes to life.”

The asset managing giant has been doing work with Saudi Arabia for years, and in 2018 made clear it would not pull out despite major controversy over the killing of journalist Jamal Khashoggi by Saudi agents.

In another move increasing its ties to the kingdom, BlackRock in July 2023 gave Saudi Aramco CEO Amin Nasser a seat on its board of directors. Aramco is the largest oil company in the world.

At the time, BlackRock said the move reflected the firm’s emphasis on the Middle East as part of its long-term strategy.

— CNBC’s Yun Li contributed to this report.