Kuwaiti investment firm Markaz told Reuters it planned to expand into real estate and financial services in Saudi Arabia and would set up a fund to tap low prices in the US mortgage debt market.

Markaz was looking to acquire a financial services firm and set up a real estate company in Saudi Arabia to take advantage of growth in the world's largest oil exporter, general manager Manaf Alhajeri told the Reuters Middle East Investment Summit.

'We signed memorandum of understanding for both opportunities,' he told Reuters.

Markaz wanted to buy a majority stake in an unlisted financial services firm in Saudi Arabia with a capital of SR50 million ($13.33 million).

'It's going to begin with investment banking ... There is a tremendous deal flow of opportunities across sectors. We are going to expand our money management expertise,' Alhajeri said.

The company also wants to set up with Kuwaiti and Saudi partners a real estate company with a capital of 500 million riyals of which Markaz would provide 50-75 million riyals.

'There is an interesting gap between supply and demand with residential property,' he added.

Alhajeri also said the company is planning a fund of up to $100 million to invest in distressed debt in the US mortgage industry.

'We see real value on distressed debt-based on mortgage financing,' he told Reuters. 'We are looking very actively at opportunities.'

Prices on some debt had fallen to between 40 percent and 60 percent of par value, he said. The fund would be between $50 million and $100 million. - Reuters