Middle Eastern sovereign wealth funds have emerged as the dominant horses in the global investment landscape, accounting for more than half of the total value of deals made by state-backed investors in the first half of 2024, according to data compiled by Bloomberg, amid a decline in spending by their global peers.
Investment boom
Institutions such as Saudi Arabia’s Public Investment Fund, Abu Dhabi Investment Authority and Qatar Investment Authority collectively backed deals worth $52 billion, according to Global SWF Advisory.
This represents 54% of the total $96 billion deployed by sovereign wealth funds worldwide, which is the highest percentage since 2009, according to what Bloomberg quoted from the consulting firm.
In this context, the contribution of sovereign wealth funds in the Middle East reached 39% in the second half of 2023.
Strategic importance
These figures – according to Bloomberg – highlight the strategic importance of Middle Eastern funds, which collectively control assets worth $4 trillion, in global capital flows.
Investment bankers, technology industry leaders and corporate executives are increasingly drawn to the region, seeking support for corporate buyouts, new fundraising and investment plans, the agency said.
“While market uncertainty has prompted global funds to be cautious, funds in the Gulf, particularly in Abu Dhabi, have received significant gains from oil and are more active than ever,” Diego Lopez, managing director of Global SWF Advisory, said in a report.
Top players and their trends
Saudi Arabia’s Public Investment Fund was the world’s most active sovereign wealth fund in the first half of the year, boosted by asset transfers from the government.
Although current oil prices are not enough to cover government spending, the Saudi government has found alternative ways to finance the investment activities of the Public Investment Fund, according to Bloomberg.
In contrast, several Asian funds, including Singapore’s GIC Pte and Temasek Holdings Pte, have cut their investments.
Although the absolute amount invested by sovereign wealth funds from Saudi Arabia, the UAE, Qatar, Kuwait, Oman and Bahrain has declined, their share of total state-controlled global investments has increased.
Not all investments are outward-facing, according to Bloomberg. For example, the Public Investment Fund’s biggest deal was domestically focused. Meanwhile, Lunett, an Abu Dhabi-based fund with $105 billion under management, took a stake in Dubai’s largest office tower.
