Inside ZYA Fund's SAR 300 million bet on fashion
Category: News
By Raza
Published: 2026-06-23T11:10:16.000Z
Saudi Arabia has poured money into the headline grabbing corners of its cultural ambitions, but fashion has quietly become the next sector to get dedicated capital. The Fashion Fund has unveiled a new identity as ZYA Fund, the kingdom's first private equity vehicle for fashion, with SAR 300 million to deploy.
Saudi Arabia has spent years pouring money into the headline grabbing corners of its cultural ambitions, from giga projects to film and gaming, but fashion has quietly become the next sector to get its own dedicated pool of capital. The Fashion Fund has unveiled a new public identity as ZYA Fund, billed as the kingdom's first private equity vehicle dedicated entirely to the fashion sector. With a total investment size of SAR 300 million, roughly $80 million, the fund is anchored by the Cultural Development Fund, which holds a 40 percent stake, while Merak Capital serves as the fund manager. The rebrand was paired with the inaugural meeting of its board, signaling that the vehicle is moving from concept into active deployment. The structure behind ZYA is the part worth understanding, because it reflects a deliberate model rather than a simple government handout. The Cultural Development Fund anchors the public capital, but the day to day investing is handled by Merak Capital, a Capital Market Authority licensed manager that oversees more than SAR 3 billion in assets across various vehicles. CDF chief executive Majed Alhugail framed the logic plainly, saying the fund wanted a partner that could build a sector, manage public money responsibly and execute over the long term. That blend, public capital paired with institutional grade private discipline, is intended to bring risk management, transparent reporting and proper investment processes to a part of the economy that has run largely on short term financing. What ZYA is actually trying to fix is a structural mismatch. Saudi Arabia's fashion scene has no shortage of creative energy or consumer demand, but it has lacked the patient, long term capital needed to let brands mature and scale. The fund will invest across the full value chain rather than just backing labels, spanning design and production, supply chains, e-commerce and beauty, and it plans to make between five and seven investments targeting Saudi brands with the capacity to expand regionally and globally. There is also a notable clarification embedded in the launch, namely that visibility through programs like Saudi 100 Brands is not the same as underwriting, bringing designer expectations into line with normal private equity discipline. The numbers behind the thesis explain the appetite. Fashion and beauty together contribute around 2.6 percent of Saudi GDP, and the kingdom accounts for roughly 40 percent of the entire GCC fashion industry. The sector already supports upward of 340,000 jobs, 55 percent of them held by women, and is projected to contribute some $40 billion to GDP by 2029, with luxury driving a meaningful slice. Those figures make fashion a credible non oil growth pillar rather than a vanity project. The regional read fits the broader pattern. Across the Middle East and North Africa, governments are increasingly treating creative industries as investable economic sectors rather than cultural ornaments, and Saudi Arabia is moving fastest under Vision 2030 and its National Culture Strategy. A dedicated fashion fund, professionally managed and tied to national diversification goals, is a notable test case for whether targeted capital can mature an entire creative sector, and a template the rest of the Gulf is likely to study.