The UAE sovereign wealth funds are leading GCC peers, and their combined assets under management (AUM) are on track to reach $2.2 trillion by the end of 2024. Saudi Arabia follows closely behind with $1.12 trillion in AUM. According to data provider and consultancy Global SWF, the AUM of SWFs from the GCC, including the top five funds known as the “Oil Five,” are expected to grow to $7.3 trillion by 2030 with investments in the first nine months of 2024 hitting $55 billion. These Oil Five SWFs include the Abu Dhabi Investment Authority (Adia), sovereign investors ADQ and Mubadala, Saudi Arabia’s Public Investment Fund, and the Qatar Investment Authority.
During the first nine months of 2024, these SWFs made new investments totaling around $55 billion across 126 transactions, representing about 40 percent of all deals done globally by state-backed investors, similar to figures from 2023. The total AUM of GCC SWFs currently stands at $4.9 trillion and is expected to exceed $5 trillion by early 2025 and reach $7.3 trillion by 2030. By the end of the decade, their total AUM is projected to reach $10.2 trillion.
Global SWF reports that 877 companies are listed on the seven stock exchanges in the GCC, with a total market capitalization of $4.3 trillion. Approximately 70 percent of these companies are owned by the states or state-backed investors. Mubadala, Abu Dhabi’s second-largest wealth fund, saw its AUM rise by 9.5 percent in 2023 to $302.2 billion. The fund deployed funds across various sectors such as technology, digital infrastructure, life sciences, renewable energy, and private credit.
Despite a significant portion of investments being routed to the US and the UK, GCC SWFs are increasingly looking towards China for investment opportunities. China has attracted $9.5 billion in capital from GCC SWFs, with many funds diversifying into Chinese assets due to the country’s growing appeal and potentially discounted asset prices. Sovereign investors have historically focused on the US, but are now actively seeking opportunities in China and India as well.
Royal Private Offices (RPOs) in the GCC, especially in the UAE, have been experiencing significant growth. Global SWF has identified 35 major GCC RPOs that collectively manage $500 billion in investments. State-owned investors in the GCC are also making strategic investments in advanced and emerging market economies across the Americas, Europe, and Asia. The sovereign funds have seen a surge in global deal-making, with $38.2 billion deployed across 58 deals in the first half of 2024.
The Covid-19 pandemic sparked a wave of dealmaking by Gulf sovereign investors, with Saudi Arabia’s Public Investment Fund (PIF) leading the way. PIF remains the most active sovereign fund globally, fueled by government asset transfers. In collaboration with private equity group Ardian, PIF acquired stakes in London Heathrow Airport for $4.3 billion. Additionally, PIF took a 49 percent stake in Rocco Forte Hotels, a luxury hotel chain operating in Europe.
Overall, GCC SWFs are actively exploring investment opportunities in various markets, with a particular focus on diversification and strategic investments in both traditional and emerging sectors. The region’s sovereign wealth funds are set to play a significant role in shaping the future of global investments in the coming years.
