Latest news with #SWFs
Al Etihad
28-04-2025
- Business
- Al Etihad
Sovereign wealth funds are a major global investment force
29 Apr 2025 01:20 By: Abdulla Abdulrahman AlKhaja*Sovereign wealth funds (SWFs) emerged in the mid-20th century and rose to prominence in the following decades, becoming key players in the global investment landscape. These funds aim to drive growth and stability by investing financial surpluses, foreign currency reserves, and revenues from natural resources in international markets to achieve economic and financial of the end of 2024, SWFs worldwide manage assets exceeding $13 trillion, an increase of approximately 11.1% compared to $11.7 trillion in 2023. The practices of SWFs in the global economy have proven effective in promoting stability during times of crises, mitigating the risks of resource depletion or market volatility. Domestically, these funds contribute to maintaining stability amid declining resources and market fluctuations, safeguarding the rights of future generations to a better quality of life, and supporting broad-based economic growth through diversified economies. They also champion strategies that boost investments and encourage local enterprise are typically managed by national authorities. They operate under strict risk management guidelines, focusing on prudent asset allocation and diversifying value-preserving and value-adding projects, with the goal of achieving stronger medium- and long-term invest across a broad range of global asset classes, including equities, real estate, infrastructure, and technological innovation. Their aim is to diversify national economies and support investment sectors and development projects at both the local and international levels, thereby enhancing a country's competitiveness within the global economy. By investing worldwide, SWFs help mitigate risks associated with exposure to a single national economy or specific industry. During crises, such as the 2008 financial crunch and the COVID-19 pandemic, markets slow down, but through investment diversification, SWFs ensure they are not overly exposed to a single asset class that could suffer heavy losses. During times of economic downturn, when asset prices are low, their investment strategies can help stabilise financial markets by providing liquidity and restoring investor confidence. Moreover, their focus on long-term investment offers a more prudent approach, as it is less affected by short-term market the 2008 global financial crisis, SWFs played a critical role in rescuing global markets from collapse, particularly in the United States and Europe. They invested heavily in major companies and banks that were on the verge of failure. As a result, these funds are now highly relied upon both in the West and the East, especially as they increasingly turn their investment focus towards emerging markets in Asia, Africa, and Latin also have a significant impact on infrastructure projects, such as transportation, energy, water, and technology, thanks to their ability to rapidly inject capital for long-term investments without the need to wait for external financing. In the experiences of several countries, SWFs have successfully driven major transformations in infrastructure and economic development. During periods of economic crisis, these funds serve as critical sources of financing, helping nations recover from the effects of natural the Middle East, the establishment of SWFs began in Kuwait in 1953, with the aim of transforming oil revenues into long-term economic security, ensuring a prosperous future for coming generations, and safeguarding the country's economic stability in the post-oil era. In the UAE, Mubadala Investment Company stands out as one of the world's leading SWFs in terms of spending, injecting $29.2 billion into global markets in 2024. Meanwhile, Norway's Government Pension Fund Global continues to hold the title of the world's largest SWF, approaching the $2 trillion mark, followed by the China Investment Corporation. The Abu Dhabi Investment Authority manages around $1.1 trillion in assets, while the Kuwait Investment Authority manages approximately $969b. Saudi Arabia's Public Investment Fund follows closely with around $925b in assets under management. Today, SWF investments are no longer concentrated solely in Western markets; the Global South, including Middle Eastern and developing Asian nations, has become an increasingly important destination. Investments are growing particularly in renewable and clean energy sectors, green transition initiatives, and climate change mitigation efforts. SWFs represent a formidable force in the global economy, thanks to their vast asset bases – estimated at around $136.1 billion in 2024, according to Global SWF – and their ability to adapt to economic and geopolitical shifts. They are helping to shape the future of global investment and are increasingly recognised as a critical engine for sustainable development worldwide. *The columnist is a writer at the think-tank firm TRENDS Research & Advisory
Khaleej Times
26-03-2025
- Business
- Khaleej Times
Gulf sovereign fund assets set to hit $18 trillion by 2030
Spearheaded by the UAE's three major funds, Gulf Sovereign Wealth Funds (SWFs) are emerging as key players in the global investment arena. With total assets under management projected to soar from $12 trillion at the end of 2024 to $18 trillion by 2030, these funds are set to redefine the global investment landscape. At the forefront are five formidable entities: the Abu Dhabi Investment Authority (Adia), Mubadala, Abu Dhabi Developmental Holding Company, Saudi Arabia's Public Investment Fund (PIF), and the Qatar Investment Authority (QIA). Together, they dominate regional investment activities, showcasing the Gulf's growing influence on the global stage. A remarkable trend accompanying this growth is the rise of Royal Private Offices (RPOs), which now control around $500 billion in assets. According to a Deloitte report, these RPOs have become essential in shaping the future of sovereign wealth funds in the region. They often mirror the activities of established funds, blurring the lines between state-controlled entities and private family offices. This trend has led to the creation of new funds linked to influential families, further diversifying the Gulf's investment portfolio. The report highlights that Gulf SWFs have been on an aggressive investment spree, deploying $82 billion in 2023 alone and another $55 billion in the first nine months of 2024. With approximately 40 per cent of global SWF assets under their control, and six of the ten largest funds worldwide, these entities are not just participants — they are reshaping investment strategies amid intensifying competition. Julie Kassab, Deloitte's sovereign wealth fund leader for the Middle East, underscores the Gulf region's pivotal role: 'We are witnessing these funds not only expand their geographical footprint but also significantly enhance their internal capabilities. They are setting new standards for performance and governance.' A significant shift in focus is evident as Gulf funds increasingly invest in fast-growing markets outside traditional Western economies. With an eye on Asia, they are establishing offices in the Asia-Pacific region and ramping up allocations to burgeoning economies such as China, India, and Southeast Asia. Notably, Gulf SWFs have invested an estimated $9.5 billion in China in the year ending September 2024, positioning themselves as key players in a market where Western investors are pulling back. Africa is another frontier of interest, particularly in the mining sector, as Gulf states look to capitalise on high-risk extractive ventures. The UAE and Saudi Arabia are actively investing in this area, both directly and through multinational mining firms, signaling their readiness to explore new opportunities. As competition intensifies, Gulf SWFs are under pressure to enhance their performance and risk management practices. Many are adopting a more proactive stance, seeking better reporting from portfolio companies and asserting influence at the board level. This drive for excellence has also intensified the competition for talent, with Gulf funds employing around 9,000 professionals and offering attractive packages to lure seasoned experts from established global funds. However, the global landscape is shifting towards protectionism, particularly in developing economies. Governments are reassessing their strategies regarding strategic assets, leading to the emergence of domestically focused funds that aim to co-invest alongside international partners rather than compete directly with Gulf players. Deloitte also notes a growing trend toward protectionism globally, particularly in developing economies, where governments are reassessing their approach to strategic assets. This shift has led to the creation of new domestically focused funds, often designed to co-invest alongside international partners rather than compete directly with established Middle Eastern players.
Al Etihad
24-03-2025
- Business
- Al Etihad
Gulf SWFs will continue to play important role on global stage: Report
24 Mar 2025 13:24 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 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 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 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.
Arabian Business
23-03-2025
- Business
- Arabian Business
Middle East M&A market resilient in 2024 as AI, renewables and infrastructure deals stand out
Middle East mergers and acquisitions (M&A) deals volumes experienced a modest decline of only 4 per cent, from 493 deals in 2023 to 475 in 2024, according to a PwC report. Despite the decline, the region significantly outperformed the global market's decline of 17 per cent. The PwC report, titled 'Bold moves: Big bets, bigger growth, highlighting key mergers and acquisitions (M&A) in the Middle East in 2024', highlights resilience and optimism in the region. Middle East M&A activity Large-scale transactions in AI, renewable energy, and infrastructure fuelled the region's M&A momentum. Romil Radia, Deals Markets Leader, PwC Middle East, said: 'In 2024, the Middle East's M&A market demonstrated remarkable resilience and confidence, driving strategic investments in sectors such as AI, renewable energy and infrastructure. 'The region saw a notable rise in large-ticket deals, reflecting the bold ambitions of investors to accelerate regional diversification, bringing in new capabilities and strategic expertise to strengthen key industries and help develop the newer sectors. 'Sovereign wealth funds and Middle East corporates are actively expanding their global footprint, positioning themselves for an even bigger push in 2025.' Key themes arose within the regional M&A market in 2024 with examples such as: Technology and AI drives business reinvention: Bayanat AI's $1.5bn acquisition of Al Yah Satellite Communication has reinforced its leadership in advanced technology. Moreover, Qatar's Ooredoo secured $550mn to expand AI and data centre infrastructure, further strengthening the region's digital transformation. Meanwhile, Saudi Arabia's 'Project Transcendence,' a $100bn AI investment initiative, underscores the country's long-term commitment to deep tech and innovation Sovereign Wealth Funds (SWFs) continue to shape homegrown economic growth: SWFs continue to prioritise investments in local businesses, industries and projects, where dealmaking will likely increase in sectors critical to the region's long-term economic goals. This could lead to a greater number of domestic deals as companies look to align with national priorities and regulatory frameworks that support local development Green energy transitions drive new investment strategies: Masdar's $2.7bn acquisition of Greece's Terna Energy highlights the Middle East's leadership in renewable energy, reinforcing its commitment to sustainability Increasing private participation aids diversification: Saudi Arabia's healthcare sector now sees 53 per cent of investments coming from the private sector, reflecting the country's push toward economic diversification. Meanwhile, Egypt's historic $35bn ADQ-led investment deal marks a significant step in its privatisation efforts, attracting foreign capital and fostering private sector growth across key industries Global PE could fuel Middle East M&A boom: The global private equity market saw a surge in large-scale transactions, with the number of deals valued over $1bn rising from 430 in 2023 to more than 500 in 2024, driving an 11 per cent rise in average deal sizes. This reflects the global trend of increased asset supply expected to come to the market, driven by the increasing pressure on PE players to exit mature portfolio company investments. In the Middle East, there was a slight uptick in PE deal volumes with inbound deals playing a significant role in PE activity, totalling 108 transactions. Additionally, while only one regional deal exceeding $1bn was recorded in 2023, 2024 saw five such deals, with the largest reaching $3.6bn highlighting growing investor confidence in the region The Middle East's M&A landscape is expected to continue its expansion, with more than 50 per cent of regional CEOs planning acquisitions within the next three years. AI, digital transformation, and sustainability are expected to drive dealmaking, while Saudi Arabia, the UAE and Egypt accelerate privatisation to attract private sector investment. Additionally, cross-border M&A and rising foreign investment are expected to reshape the market, further solidifying the region's position as a global economic hub. The continued creation of new sectors and sustained investment in high-growth areas should provide globally-minded corporations with compelling incentives to invest in the region. These factors will empower dealmakers to unlock significant growth opportunities in 2025 and beyond.
Zawya
21-03-2025
- Business
- Zawya
Bigger, bold M&A deals fuel transformative growth in Mideast region
In 2024, the Middle East's mergers and acquisitions (M&A) market demonstrated remarkable resilience and confidence, driving strategic investments in sectors such as AI, renewable energy and infrastructure, according to a report by PwC Middle East. According to the report, the region's dealmaking landscape was driven by a growing emphasis on innovation and sustainability across various sectors. Despite global headwinds, Middle East deals volumes experienced a modest decline of only 4% - from 493 deals in 2023 to 475 in 2024 - significantly outperforming the global market's decline of 17% and showcasing the region's resilience in M&A activity. Large-scale transactions in Artificial Intelligence (AI), renewable energy and infrastructure have fueled the region's M&A momentum and are expected to continue driving dealmaking, stated PwC Middle East in its latest TransAct Middle East report, titled, "Bold moves: Big bets, bigger growth," highlighting key M&A in the Middle East in 2024. Saudi Arabia, the UAE, and Egypt have accelerated initiatives to attract private sector investment. Sovereign wealth funds and corporations are actively expanding their global footprint, positioning themselves for an even bigger push in 2025. In the Middle East, there was a slight uptick in private equity (PE) deal volumes with inbound deals playing a significant role in PE activity, totalling 108 transactions. While only one regional deal exceeding $1 billion was recorded in 2023, 2024 saw five such deals, with the largest reaching $3.6 billion highlighting growing investor confidence in the region, it added. Romil Radia, Deals Markets Leader, PwC Middle East, said: "In 2024, the Middle East's M&A market demonstrated remarkable resilience and confidence, driving strategic investments in sectors such as AI, renewable energy and infrastructure." "The region saw a notable rise in large-ticket deals, reflecting the bold ambitions of investors to accelerate regional diversification, bringing in new capabilities and strategic expertise to strengthen key industries and help develop the newer sectors," noted Radia. "Sovereign wealth funds and Middle East corporates are actively expanding their global footprint, positioning themselves for an even bigger push in 2025," he added. Key themes arose within the regional M&A market in 2024 with examples such as: *Technology and AI drives business reinvention: Bayanat AI's $1.5 billion acquisition of Al Yah Satellite Communication has reinforced its leadership in advanced technology. Moreover, Qatar's Ooredoo secured $550 million to expand AI and data centre infrastructure, further strengthening the region's digital transformation. Meanwhile, Saudi Arabia's 'Project Transcendence,' a $100 billion AI investment initiative, underscores the country's long-term commitment to deep tech and innovation. *Sovereign Wealth Funds (SWFs) continue to shape homegrown economic growth: SWFs continue to prioritise investments in local businesses, industries and projects, where dealmaking will likely increase in sectors critical to the region's long-term economic goals. This could lead to a greater number of domestic deals as companies look to align with national priorities and regulatory frameworks that support local development. *Green energy transitions drive new investment strategies: Masdar's $2.7 billion acquisition of Greece's Terna Energy highlights the Middle East's leadership in renewable energy, reinforcing its commitment to sustainability. Increasing private participation aids diversification: Saudi Arabia's healthcare sector now sees 53% of investments coming from the private sector, reflecting the country's push toward economic diversification. Meanwhile, Egypt's historic $35 billion ADQ-led investment deal marks a significant step in its privatisation efforts, attracting foreign capital and fostering private sector growth across key industries. According to PwC report, the global private equity market saw a surge in large-scale transactions, with the number of deals valued over $1 billion rising from 430 in 2023 to over 500 in 2024, driving an 11% rise in average deal sizes. This reflects the global trend of increased asset supply expected to come to the market, driven by the increasing pressure on PE players to exit mature portfolio company investments. In the Middle East, there was a slight uptick in PE deal volumes with inbound deals playing a significant role in PE activity, totalling 108 transactions. Additionally, while only one regional deal exceeding $1bn was recorded in 2023, 2024 saw five such deals, with the largest reaching $3.6bn highlighting growing investor confidence in the region, it stated. The Middle East's M&A landscape is expected to continue its expansion, with over 50% of regional CEOs planning acquisitions within the next three years. AI, digital transformation, and sustainability are expected to drive dealmaking, while Saudi Arabia, the UAE and Egypt accelerate privatisation to attract private sector investment. Additionally, cross-border M&A and rising foreign investment are expected to reshape the market, further solidifying the region's position as a global economic hub, he added. The continued creation of new sectors and sustained investment in high-growth areas should provide globally-minded corporations with compelling incentives to invest in the region. These factors will empower dealmakers to unlock significant growth opportunities in 2025 and beyond.- TradeArabia News Service Copyright 2024 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (
