LONDON (Reuters) - The world's largest asset manager BlackRock ( BLK ) said on Tuesday it plans to launch a new investment platform in Saudi Arabia, backed by up to $5 billion from Saudi sovereign wealth fund the Public Investment Fund (PIF).

BlackRock ( BLK ) and PIF said they had signed a memorandum of understanding under which BlackRock ( BLK ) would establish a Riyadh-based multi-asset investment platform, anchored by PIF's initial cash injection, subject to certain agreed milestones being hit.

The two parties said the platform would accelerate growth of Saudi Arabia's capital markets, with a Riyadh-based investment team looking to raise additional funds locally and overseas.

The PIF is central to Crown Prince Mohammad bin Salman's plans to transform the kingdom's economy by building new industries and investing in massive infrastructure development projects that the government refers to as giga-projects.

A BlackRock ( BLK ) spokesperson said its platform would be focused on Saudi Arabia but would span investments across the Middle East and North Africa, including infrastructure and credit within private markets and equities in public markets.

BlackRock ( BLK ) chairman and CEO Larry Fink said that Saudi Arabia had become an "increasingly attractive" destination for international investment.

PIF's deputy governor Yazeed A. Al-Humied said the agreement would help make the Saudi investment market more internationally diverse and dynamic.

The PIF has transformed in recent years from a sleepy sovereign investor into a global investment vehicle that makes multi-billion dollar bets on everything from technology to sports.

PIF invested $31.5 billion last year to become the world's top spending sovereign wealth fund.