Key Takeaways
- • Gulf sovereign wealth funds held roughly $4 trillion across the six largest SWFs in the region, with Middle Eastern SWFs accounting for over 54% of global SWF deployment in the first half of 2024, the highest share since 2009, according to Skadden, Arps, Slate, Meagher & Flom.
- • Mubadala led all investors globally in 2024 with $29.2 billion across 52 deals, while ADIA, ADQ, PIF and QIA ranked among the top 10 global dealmakers, collectively investing a record $82 billion.
- • Abu Dhabi, with $1.7 trillion in SWF-managed assets as of October 2024, became the world's richest city by SWF assets, and its AUM rose 226% over the prior year as firms including BlackRock, General Atlantic, PGIM and Nuveen opened offices there.
- • Gulf SWFs are shifting from passive minority stakes to controlling-stake transactions abroad, while the GCC is liberalizing inbound FDI rules, with roughly $47 billion invested in the GCC in 2023 and Saudi Arabia targeting $100 billion in annual FDI by 2030.
- • Regional equity markets have grown, with Dubai and Abu Dhabi exchanges exceeding $1 trillion in combined market capitalization by November 2024, and ION Analytics projecting continued deal activity in 2025.
Summary
Skadden, Arps, Slate, Meagher & Flom reports that sovereign wealth funds have made the Middle East a major global center of wealth and investment, particularly across the six Gulf Cooperation Council states: the UAE, Saudi Arabia, Qatar, Kuwait, Bahrain and Oman. The six largest regional SWFs by assets under management are ADQ, ADIA, the Kuwait Investment Authority, Mubadala, the Public Investment Fund (PIF) of Saudi Arabia and the Qatar Investment Authority. Together they manage about $4 trillion, three of them based in Abu Dhabi. By the third quarter of 2024, M&A deal value in the Middle East had risen 25.3% year over year, led by the UAE and Saudi Arabia.
Abu Dhabi has emerged as a particular focal point. As of October 2024, the emirate's $1.7 trillion in SWF-managed assets made it the world's richest city by that measure. The article attributes a 226% rise in AUM over the last year to asset managers opening offices there, including hedge funds, private equity firms, institutional funds and venture capital firms, with PGIM, General Atlantic, BlackRock and Nuveen cited as recent entrants. The Abu Dhabi Global Market issued 1,271 new licenses in the first half of 2024 under a streamlined approval process. Dubai and Abu Dhabi exchanges surpassed $1 trillion in combined market capitalization by November 2024, driven partly by International Holding Co.-linked companies and large IPOs including Lulu Hypermarket's $1.72 billion Abu Dhabi listing in November 2024 and Talabat's $2 billion Dubai listing in December 2024. Saudi Arabia's exchange saw IPO, takeover and capital-raising volumes rise 85% through late 2024, with market capitalization near $3 trillion, according to ION Analytics.
Gulf SWFs are increasingly active outbound. Mubadala invested $29.2 billion across 52 deals in 2024, and the article cites its investment in Truist Insurance valuing the group at $15.5 billion, its purchase of a 42% stake in Silver Rock, and its $8.7 billion take-private of CI Financial. PIF, with Ardian, acquired a 37.6% stake in Heathrow Airport for £3.26 billion ($4.13 billion). The GCC SWFs' capital is forecast to double to $8 trillion by 2030. ION Analytics views the shift from passive minority investing toward leading deals and taking control as supportive of 2025 deal activity.
Inbound investment is also rising as the region liberalizes rules. The GCC is relaxing local partnership requirements and streamlining regulation; Saudi Arabia's new investment law places local and foreign firms under a single rule book. Notable inbound deals include Microsoft's $1.5 billion investment in UAE-based AI firm G42 in April 2024 and Brookfield's 2024 investment in Dubai-based GEMS Education as lead investor. Golden visas, revised property and inheritance rules and low taxes are intended to attract skilled foreigners. FDI into the GCC reached about $47 billion in 2023, with Saudi Arabia accounting for 62% of that total, and Saudi Arabia aims to raise annual FDI from $29 billion in 2023 to $100 billion by 2030.
Abu Dhabi has emerged as a particular focal point. As of October 2024, the emirate's $1.7 trillion in SWF-managed assets made it the world's richest city by that measure. The article attributes a 226% rise in AUM over the last year to asset managers opening offices there, including hedge funds, private equity firms, institutional funds and venture capital firms, with PGIM, General Atlantic, BlackRock and Nuveen cited as recent entrants. The Abu Dhabi Global Market issued 1,271 new licenses in the first half of 2024 under a streamlined approval process. Dubai and Abu Dhabi exchanges surpassed $1 trillion in combined market capitalization by November 2024, driven partly by International Holding Co.-linked companies and large IPOs including Lulu Hypermarket's $1.72 billion Abu Dhabi listing in November 2024 and Talabat's $2 billion Dubai listing in December 2024. Saudi Arabia's exchange saw IPO, takeover and capital-raising volumes rise 85% through late 2024, with market capitalization near $3 trillion, according to ION Analytics.
Gulf SWFs are increasingly active outbound. Mubadala invested $29.2 billion across 52 deals in 2024, and the article cites its investment in Truist Insurance valuing the group at $15.5 billion, its purchase of a 42% stake in Silver Rock, and its $8.7 billion take-private of CI Financial. PIF, with Ardian, acquired a 37.6% stake in Heathrow Airport for £3.26 billion ($4.13 billion). The GCC SWFs' capital is forecast to double to $8 trillion by 2030. ION Analytics views the shift from passive minority investing toward leading deals and taking control as supportive of 2025 deal activity.
Inbound investment is also rising as the region liberalizes rules. The GCC is relaxing local partnership requirements and streamlining regulation; Saudi Arabia's new investment law places local and foreign firms under a single rule book. Notable inbound deals include Microsoft's $1.5 billion investment in UAE-based AI firm G42 in April 2024 and Brookfield's 2024 investment in Dubai-based GEMS Education as lead investor. Golden visas, revised property and inheritance rules and low taxes are intended to attract skilled foreigners. FDI into the GCC reached about $47 billion in 2023, with Saudi Arabia accounting for 62% of that total, and Saudi Arabia aims to raise annual FDI from $29 billion in 2023 to $100 billion by 2030.
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