DUBAI — Saudi Arabia’s first private equity fund dedicated to the fashion sector now has a name and a public identity to match its ambitions.
ZYA Fund, the $80 million (300 million Saudi riyal) investment vehicle anchored by the Cultural Development Fund and managed by Merak Capital, has unveiled its brand identity and convened the inaugural meeting of its board of directors. The fund was announced at the Cultural Investment Conference and represents, in the words of CDF chief executive officer Majed Al-Hugail, “the first time a dedicated fashion investment vehicle in the kingdom carries a distinct public identity.”
The newly seated board reflects the scale of that ambition. It is chaired by H.E. Hamed Fayez, vice minister of culture and vice chairman of the Fashion Commission, with Al-Hugail serving as vice chairman. Other directors include Abdullah Altamami, founder and CEO of Merak Capital; Burak Cakmak, CEO of the Fashion Commission, and Ravi Thakran, chairman and CEO of Turmeric Capital, the Singapore-based consumer and luxury investment firm. CDF anchors the fund with a 40 percent stake; Merak acts as manager.
Speaking exclusively to WWD, Al-Hugail said ZYA is designed to correct a structural mismatch between the creative energy of the Saudi fashion market and the financing infrastructure supporting it.
“The market has shown strong further growth potential, driven by robust consumer demand, entrepreneurial energy, and creative business models, yet it has largely relied on short-term financing structures,” Al-Hugail said. “CDF identified a clear gap for patient, sustainable, long-term capital capable of supporting sector maturity.”
The numbers underpinning that thesis are increasingly central to the kingdom’s fashion pitch. Fashion and beauty together contribute about 2.6 percent of Saudi GDP, and the Saudi fashion market accounts for around 40 percent of the entire GCC fashion industry, according to the Saudi State of Fashion Report 2025 from the Saudi’s Fashion Futures program (www.fashionfutures.com), which works with businesses, investors and others to identify trends and provides insights and connections to help capture opportunities for companies in the country’s fashion and retail sectors. Upward of 340,000 jobs exist in the sector, 55 percent of them held by women. By 2029, the industry is projected to contribute $40 billion to GDP, with at least 15 percent driven by luxury.
Al-Hugail said the sector, led by the Fashion Commission, “has now reached a stage where emerging and established brands, alongside supply chain enablers and digital platforms, demonstrate sufficient organizational readiness to benefit from institutional investment.”
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From Apparel to E-commerce
ZYA will target between five and seven investments across luxury fashion, fast fashion, apparel, beauty, footwear, jewelry and e-commerce platforms, with a clear preference for growth-stage businesses over earlier-stage ventures.
“The objective of the fund is straightforward: help Saudi fashion brands and the wider ecosystem scale into sustainable, globally competitive businesses,” Al-Hugail said.
“The fund is structured to de-risk investment by deploying disciplined capital into sustainable growth opportunities rather than targeting early-stage projects.” Its technology exposure, he added, will be directed toward “innovative organizations that enable local supply chains, operate technology-driven business models, and deploy scalable and efficient platforms in the market” — covering both brand-led businesses and the enabling platforms that sit behind them.
The investment criteria go well beyond the creative-led narratives that have defined much of Saudi fashion coverage to date. Al-Hugail framed ZYA’s thesis in unusually direct terms.
“Saudi Arabia has strong creative talent. The challenge is scale: converting innovation and creativity into commercially viable, scalable enterprises,” he said. “This includes providing operational support, strategic guidance, and access to broader ecosystems — all of which are capabilities essential for bridging the gap between creative talent and sustainable economic impact in the fashion sector.”
On what “proven traction” actually looks like, Al-Hugail was specific. The fund wants “demonstrated revenue generation supported by evidence of repeat customers and growing demand, rather than one-off or pilot sales,” alongside clear product-to-market fit, sustained consumer engagement and distinctive creative positioning. Equal weight, he said, is given to operational maturity: governance, financial records and supply chains resilient enough to scale responsibly.
Modest Fashion, Fragrance and the Import Question
Pressed on where the most investment-ready talent is emerging, Al-Hugail cited apparel, footwear, accessories, jewelry and watches, and fragrances and cosmetics — alongside digital services and e-commerce platforms “that are transforming retail models across the kingdom.”
“Modest fashion stands out for its close connection to local cultural expression while also addressing a growing regional and global consumer base,” he said.
The growth potential of fragrance and beauty brands, he added, is supported by “strong consumer loyalty, distinctive storytelling, and scalable production and distribution models” — a dynamic that also applies to jewelry and accessories, where cultural expression and craftsmanship can be combined with premium positioning and scalable supply chains.
One of the most closely watched metrics for any Saudi fashion intervention is the kingdom’s import dependency. Saudi Arabia imports about $7 billion in fashion products annually — a figure Al-Hugail said ZYA is designed to help recalibrate through targeted investment in supply chain enablers, logistics capabilities, e-commerce platforms and technology services.
“Localized value chain creation and investment in supply chain enablers are a core focus of the fund, creating opportunities for local content manufacturing across different sub-sectors of the fashion industry,” he said. “The fund’s strategy supports national priorities: developing local value chains, strengthening manufacturing and supply capabilities, enabling exports, and creating high-quality jobs within the creative economy.”
With sector development a central ambition for Vision 2030, he added, “the objective is to strengthen local resilience and resourcefulness by enabling the emergence of Saudi champions across the fashion value chain.”
Earlier this year, Merak Capital unveiled a partnership with the Fashion Commission’s Saudi 100 Brands program, the incubator that has become the public face of Saudi designer development. Al-Hugail was careful to position that relationship as a pipeline mechanism rather than an automatic pathway to capital.
“While a partnership with Saudi 100 Brands has been established, it is not an automatic pathway to funding but rather a mechanism to enhance brand visibility and strengthen deal flow,” he said. “The partnership supports greater readiness and improves the quality of opportunities under review, while allowing the fund to maintain rigorous and independent investment decision-making in line with its mandate.”
The distinction is notable. Saudi 100 Brands has, in the eyes of many of the designers it has platformed, carried an implicit promise of further institutional backing. ZYA’s position — that visibility is not the same as underwriting — brings that expectation into line with standard private equity discipline.
Fund Manager
Merak Capital, which manages over 3 billion Saudi riyal in assets, was selected as fund manager following a formal partnership agreement with CDF. Al-Hugail said the choice reflects a deliberate model in which CDF anchors public capital while specialized private managers bring market discipline and sector expertise.
“CDF wanted a partner that could build a sector, manage public capital responsibly, and execute over the long term,” he said. As a Capital Market Authority-licensed investment manager, Merak brings “risk management frameworks, transparent reporting and compliance standards, and institutional-grade investment processes” — prerequisites, in his view, for deploying public capital into a historically opaque consumer-facing industry.
The partnership, he added, “reflects Merak Capital’s capabilities, experience, and governance standards in supporting sectors of national importance, allowing CDF to de-risk the market and catalyze growth across the fashion value chain.”
Altamami, for his part, framed ZYA in unambiguously growth-and-scale terms. “Through ZYA Fund, we are creating a platform to channel capital into high-potential opportunities across the fashion value chain,” he said in a statement marking the identity launch. “Our focus is on backing ambitious Saudi brands and businesses with the capability to scale regionally and globally, while contributing to the development of a more structured and resilient fashion ecosystem in the kingdom.”
Deal Pipeline
Al-Hugail confirmed that, subject to the completion of due diligence and investment readiness, ZYA “aims to announce its first investment in the coming months.” Current evaluations span brands, supply chain enablers and digital platforms.
Even so, he was at pains to frame ZYA as a patient-capital vehicle rather than a transactional play.
“This is not a short-term initiative,” he said. “CDF is looking to create lasting value for the sector and the economy, not just financial outcomes.”
ZYA Fund, he added, “reflects CDF’s role as a long-term financial enabler rather than a transactional investor.” Investment announcements, he said, “will follow in due course as opportunities reach the appropriate level of maturity.”
The measured cadence is, in itself, a statement about how Saudi Arabia wants this next phase of its fashion build-out to be read: not as a spending spree, but as a structural rewiring of the capital stack behind one of the region’s most visible emerging sectors.
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