Fund managers raising for pre-IPO opportunities in the Kingdom have, until this year, had one practical structure available to them. The single-asset or single-opportunity fund has done that work for a long time and does it well: identify the company, raise against it, hold it, and realise on listing. If the listing does not happen, a trade-sale might.
As of April 2026, there is a second. The CMA approved a regulatory framework permitting Special Purpose Acquisition Companies to be offered and listed on Nomu, through amendments to the Implementing Regulation of the Companies Law for Listed Joint Stock Companies, the Rules on the Offer of Securities and Continuing Obligations, and the Glossary of Defined Terms. Only a licensed investment or fund manager may sponsor one which means the vehicle has been placed squarely in the hands of the fund management community rather than opened to corporate promoters generally.
The two structures are not substitutes and the more useful question is not which is better. It is which is more suitable for my investor base. A manager with an identified asset and patient capital, perhaps because of its track record, is well served by the fund. A manager with a credible pipeline but no committed capital, or with investors who will not accept a five-year lockup, now has somewhere else to go. More tools in the arsenal means more routes to a transaction, and the managers who benefit first will be those who work out early which of their opportunities suits which wrapper.
What the SPAC Adds: Liquidity Before the Asset
The most significant feature of the SPAC, and the one with no analogue in fund structures, is that the investor’s security trades before the target is acquired.
In a single opportunity fund the sequence is familiar. Capital is committed, the asset is bought, and liquidity arrives at the end years later, contingent on the manager engineering an exit. Units do not trade in the interim. An investor whose circumstances change has, in practice, no route out other than a negotiated transfer at whatever discount the secondary will bear.
A SPAC inverts that order. The vehicle lists on Nomu at the point of the offering, before a target has been identified. From that moment the investor holds a listed share that can be sold into the market to any eligible qualified investor, at a price the market sets, with no need for the manager’s consent or a transfer mechanic in the fund documents. Liquidity is from day 1, not at a distant future. Only the gains come later. The fact that the investor does not know the asset at the time of listing is remedied by its redemption right if it disagrees with the acquisition once the target is proposed.
Layered beneath that market liquidity is a second protection with no fund equivalent. Because at least 90% of capital and offering proceeds sit in escrow, and because shareholders other than the sponsor may redeem at their pro rata share of that escrow where they dissent from the transaction, an
extension, or a change to the target criteria, the investor holds both a tradable security and a redemption floor referable to cash. That combination changes the risk conversation materially. An investor who declines a single-opportunity fund because the lock is too long, or because the concentration risk is unhedgeable, is being asked a different question by a SPAC.
For the manager, this widens the addressable investor base. Family offices and institutions with liquidity policies that cannot accommodate a closed-ended single-asset commitment can hold a listed instrument. That is a real expansion of who can participate in pre-IPO exposure, not merely a repackaging of it.
The Listing Arrives With the Asset
The second structural advantage concerns the exit rather than the entry.
In a single-opportunity fund, a listing is an outcome the manager hopes to engineer years after acquisition, through a process that must be run from scratch. The Saudi record suggests how often that happens: MAGNiTT recorded 11 KSA exits in 2025, of which 10 were by way of M&A. Listing has not been the most certain exit path for private capital in the Kingdom.
By contrast, a SPAC begins its life as a listed company. When the transaction completes, the target is inside a company already trading on Nomu, its redeemable shares convert to ordinary shares, and Nomu continuing obligations attach. The pre-IPO and IPO stages collapse into a single transaction. Against a Nomu that carried approximately SAR 38.85 billion of market capitalisation in late March 2026, with foreign ownership at 1.67%, and that had seen 28 offerings by mid-June, this is a live venue rather than a theoretical one.
For a founder weighing a trade sale against a public debut, that is a genuinely different offer: partial liquidity now, listed shares for the balance, and no separate IPO process to survive.
Key Requirements
Establishment and offering
The SPAC is a joint stock company with no operating activities, carrying on investment company activities, offered and listed on Nomu. Paid-up capital must be not less than SAR 100 million. The sponsor establishes, funds and offers the vehicle, must hold between 5% and 20%, and may not act as financial advisor on the target transaction. The shares offered are redeemable shares. The articles of association must address the escrow arrangements, restrictions and shareholder rights, and the prospectus carries additional content requirements. The Nomu offering threshold for a SPAC is 30% of shares, against the 20% or 10% applying to ordinary Nomu offerings.
The search period
At least 90% of capital and offering proceeds are deposited into a segregated escrow account with permitted uses restricted by rule, the balance funding search and operating costs. Borrowing is capped at 25% of the escrowed amounts. Any pre-completion capital increase must also see 90% of proceeds escrowed. Sponsor shares are locked up in full throughout the listing period and for six months after completion, with 50% locked for a further six months.
The transaction must complete within 24 months of listing, extendable once by up to 12 months with CMA approval and an extraordinary general assembly at which the reasons are explained and at least 75% of voting rights approve, excluding the sponsor and its affiliates. The total listing period may not exceed 36 months. If no transaction completes, the SPAC is delisted and the escrow is distributed pro rata.
The target
The target must be an unlisted Saudi company, must satisfy Nomu listing requirements, and must meet the terms and criteria set out in the prospectus. A SPAC may not acquire or merge with a foreign company. The target’s fair value must be at least 80% of the escrowed amounts, and SPAC shareholders must hold at least 30% of the target following completion. An independent valuation by a financial advisor licensed for arranging activities is required. Amending the target selection criteria requires ordinary general assembly approval of at least 75% of represented voting rights, with the meeting valid if holders of at least half the shares attend.
Approval and completion
The transaction requires SPAC board approval and an extraordinary general assembly: at least two-thirds of votes for an acquisition, three-quarters for a merger. Sponsor and affiliate shares are excluded from the quorum. A shareholders’ circular must be published at least 14 days before the assembly. Disclosure during the search period is semi-annual, covering both the use of offering proceeds and the sponsor’s efforts to identify a target. Nomu corporate governance requirements apply throughout.
The Constraints Worth Designing Around
Four points should be settled before a prospectus is drafted rather than discovered afterwards.
- The sponsor, and any investment fund managed by the sponsor, may not hold direct or indirect ownership in the target. A SPAC therefore cannot be used to take an asset out of the manager’s own fund or warehouse. The vehicle raises for opportunities the manager does not yet own, which makes it complementary to the single-opportunity fund rather than an alternative route to the same asset.
- The target must satisfy Nomu listing requirements in its own right. The SPAC compresses the process; it does not relax eligibility. A company that could not list cannot be brought public this way.
- Targets must be unlisted Saudi companies, which constrains managers running pan-GCC strategies. And the route ends on Nomu: transfer to the Main Market requires two calendar years since listing, satisfaction of Main Market requirements, and a minimum average market capitalisation of SAR 200 million over the preceding twelve months.
- Sponsor economics sit in equity rather than in fees, are locked up for at least eighteen months from completion, and are worth nothing if no transaction closes. The clock is real and the supermajority vote is one from which the sponsor is excluded. Pipeline should be built before the offering, not after it.
Choosing Between Them
The decision is usually settled by three questions.
Is the asset identified? If it is, and the seller is willing, the single-opportunity fund remains the cleaner instrument. There is no search risk, no outside date, and no supermajority vote standing between the manager and completion.
What do the investors need? Where liquidity or a cash-referable floor is the obstacle to commitment, the SPAC answers a question the fund cannot. Where investors are content to be illiquid in exchange for seeing the asset before they commit, the fund is the better fit.
Where is the manager’s constraint? A manager short of opportunity should not be raising a SPAC. A manager short of capital, with a pipeline it can evidence, now has a route that does not require identifying the target first.
Neither structure displaces the other. What has changed is that pre-IPO capital in the Kingdom can now be raised in a form that trades from the first day, and managers who understand which of their opportunities belongs in which wrapper will find they can pursue more of them.