Today's Edition
A. SREENIVASA REDDY (ABU DHABI)
The Gulf funds hold about 40% of all Sovereign Wealth Fund (SWF) assets and are among six of the 10 largest funds worldwide, according to a report by Deloitte Middle East.
In 2023, Gulf SWFs invested $82 billion, about two-thirds of all new SWF activity, and another $55 billion in the first nine months of 2024, indicating sustained momentum. Key players in the region include the Abu Dhabi Investment Authority (ADIA), Mubadala and ADQ, Saudi's Public Investment Fund (PIF), and the Qatar Investment Authority (QIA).
This prominence of Gulf SWFs occurs amidst a backdrop of significant growth in the global SWF landscape.
The study notes that the number of funds has roughly tripled since 2000 globally, now totalling around 160-170, with assets under management reaching $12 trillion by the end of 2024. These assets are forecast to hit $18 trillion by 2030.
“Despite the flurry of new funds being announced by governments as diverse as Ireland and Pakistan, Gulf SWFs remain at the heart of the industry thanks to their sheer size and ability to pursue large-scale overseas transactions,” the report said.
The Deloitte Middle East study highlights that this expansion is driven by two main factors: governments establishing SWFs for the first time, and the creation of additional entities in countries with existing funds. Examples of new funds include those announced by Ireland, Portugal, and the UK, while several developing economies are also moving into the SWF sector.
According to the study, this increase in activity has led to heightened competition, with funds facing pressure to improve performance. Gulf SWFs are responding by focusing on internal performance, risk oversight, and investment management.
The Deloitte Middle East study also indicates that the competition is playing out on the international stage, with Gulf SWFs increasingly looking towards fast-growing economies outside of traditional Western markets, with a particular focus on Asia.
This includes setting up new offices in key Asia-Pacific markets to facilitate deal sourcing and execution. China has become a key destination, with Gulf funds seeking to capitalise on opportunities.
“Despite the plethora of new SWFs appearing globally, the Gulf will continue to be the focus of growth and activity, simply thanks to the sheer size of assets being deployed and a greater risk appetite,” the report said.
