Latest news with #SovereignWealthFunds
Bloomberg
13 hours ago
- Business
- Bloomberg
Mideast Funds Adopt Wall Street Pay Model
A growing number of job candidates are asking Middle Eastern sovereign wealth funds to offer them carried interest awards- a type of performance-based pay tied to investment gains. As Alex Dooler explains to Lizzy Burden on Horizons Middle East and Africa, the new approach marks a shift from their traditional reliance on high salaries and lifestyle perks. (Source: Bloomberg)
Yahoo
18 hours ago
- Business
- Yahoo
Mideast Funds Adopt Wall Street Pay Model
A growing number of job candidates are asking Middle Eastern sovereign wealth funds to offer them carried interest awards-- a type of performance-based pay tied to investment gains. As Alex Dooler explains to Lizzy Burden on Horizons Middle East and Africa, the new approach marks a shift from their traditional reliance on high salaries and lifestyle perks. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
30-07-2025
- Business
- Reuters
KKR raises $6.5 billion for asset-backed financing
July 30 (Reuters) - Investment giant KKR (KKR.N), opens new tab said on Wednesday it had raised $6.5 billion to provide asset-backed financing, as companies and investors seek out credit alternatives beyond traditional loans. Asset-backed financing refers to loans backed by assets such as mortgages or royalties that have predictable cash flows. Such loans do not rely solely on a borrower's creditworthiness. KKR said it had hauled in $5.6 billion for a fund, named KKR Asset-Based Finance Partners II, and about $1 billion from separate accounts focused on the same type of investments. These funds give borrowers access to loans they might not get from banks, as traditional lenders have been pulling back from riskier loans due to strict regulations. The funds also offer firms such as KKR exposure to investments with consistent returns. "The $6 trillion ABF market, expected to top $9 trillion by 2029, remains undercapitalized despite its rapid growth," KKR's Global Head of Private Credit, Daniel Pietrzak, said. The latest fund attracted commitments from a wide base of investors, including pensions, sovereign wealth funds, insurers, asset managers and family offices, the company said. KKR launched its ABF in 2016. It manages more than $74 billion in ABF assets under management.
Zawya
21-07-2025
- Business
- Zawya
Middle East Sovereign Investors recalibrate strategies amid geopolitical uncertainty and market shifts
Fixed income and private credit gain importance as Middle East sovereign wealth funds (SWFs) manage liquidity and diversify exposures Middle East SWFs prioritise China with 60% planning to increase allocations over the next five years Middle East SWFs cautiously increase direct digital asset exposure while navigating regulatory challenges Dubai, UAE – Political and policy decisions have become core drivers of investment strategy, prompting sovereign investors to fundamentally reassess portfolio construction and risk management, according to the thirteenth annual Invesco Global Sovereign Asset Management Study Geopolitical tensions (84%) remain the dominant short-term risks for sovereign wealth funds (SWFs) and central banks in the region, followed by a fallout from the Middle East conflict (68%). An overwhelming majority (96%) of respondents believe that geopolitical rivalry will be a key driver of volatility, while 91% expect protectionist policies to entrench persistent inflation across developed economies. Most notably, 52% of Middle East SWFs now see deglobalisation as a material threat to investment returns, underscoring a marked shift in the market narrative. Invesco's study, a leading indicator on sovereign investor behaviour, draws on the insights from 141 senior investment professionals, including chief investment officers, heads of asset classes, and portfolio strategists, from 83 SWFs and 58 central banks across the world, collectively managing $27 trillion in assets.* Active strategies gain traction alongside foundational passive exposure One of the key shifts in portfolio construction identified in the study is the greater use of active strategies by respondents. On average, Middle East SWFs maintain 78% of their equities portfolio and 77% of their fixed income portfolio in active strategies. The survey shows that 33% of SWFs in the region are planning to increase active equity exposures over the next two years, with 50% doing the same with fixed income. While passive strategies continue to provide efficiency and scale benefits, particularly in highly liquid public markets, active approaches are being used to address index concentration risks, navigate regional dispersion, and enhance scenario resilience in an increasingly fragmented landscape. At the same time, portfolio construction decisions such as asset class, geographic, and factor tilts are increasingly viewed as core expressions of active management. Fixed income redefined and reprioritised Due to a combination of geopolitical shifts and interest rate normalisation, traditional portfolio construction models are being rethought, with many SWFs turning to more dynamic portfolio approaches that includes more fluid asset allocations, enhanced liquidity management, and greater use of alternatives. Within this landscape, fixed income has assumed a new importance within SWF portfolios, becoming the second-most favoured asset class behind infrastructure. On a net basis, 30% of Middle East SWFs plan to increase their fixed income exposure over the next 12 months. 'Amid geopolitical uncertainty and market shifts, investors across the Middle East are recalibrating their strategies,' says Josette Rizk, Head of Middle East and Africa at Invesco. 'Active asset management is growing in prominence due to its adaptability to a rapidly evolving economic environment. While private credit holds on to its popularity, fixed income has rebounded as the region's SWFs diversify exposures.' Private credit takes centre stage as a new diversification tool Private credit continues to gain momentum among SWFs in the Middle East, with 63% accessing the asset class through funds and 50% making direct investments or co-investments. The survey indicates that 50% of SWFs worldwide, including 40% of those based in the Middle East, plan to increase allocations to private credit over the next year. This growing interest reflects a broader rethinking of diversification as traditional stock-bond correlations erode in a higher-rate, higher-inflation environment. Sovereign investors are turning to private credit for floating-rate exposure, customised deal structuring, and return profiles that are less correlated with public markets. Once considered a niche asset class, private credit is now viewed as a strategic pillar of long-term portfolio construction. China remains a high priority in a fragmented emerging market landscape SWFs are taking a more selective approach to emerging markets. Asia (excluding China) is a high priority for 43% of respondents worldwide and 25% in the Middle East. Meanwhile, China is once again an important focus for 28% SWFs globally and 33% in the Middle East, with 60% of the region's SWFs expecting to increase China allocations over the next five years. SWFs are increasingly orientating their China strategies around specific technology sectors, such as AI, semiconductors, EVs, and renewables, with 80% of respondents in the region believing the country's technology and innovation capabilities will become globally competitive in the future. 'Middle East SWFs are focusing a large proportion of their portfolios on Asian economies,' adds Rizk. 'Based on the outcomes of our study, we anticipate rising investment flows between the Middle East and China, with higher growth potential in selected sectors.' Active management is viewed as essential in this environment. Just 25% of Middle East SWFs rely on passive emerging market (EM) strategies, while 73% access EMs through specialist managers, citing the need for local insight and tactical flexibility. Digital assets, continued exploration Digital assets are no longer seen as an outsider topic among institutional investors. This year's study shows a small but notable increase in the number of SWFs that have made direct investments in digital assets – 11%, compared to 7% in 2022. Allocations are most common in the Middle East (22%), Asia Pacific (18%), and North America (16%), in contrast with Europe, Latin America, and Africa, where they remain at 0%. For Middle East SWFs, the biggest barriers to investing in digital assets include regulatory challenges (100%) and volatility (86%). 'Investors are increasingly open to exploring the value digital assets may add to their portfolios,' says Rizk. 'In the Middle East, allocations are growing cautiously as investors balance new opportunities with regulatory challenges and market volatility.' Globally, central banks are simultaneously advancing their own digital currency initiatives, balancing innovation potential against systemic stability considerations. While no central bank respondents in the Middle East have launched a digital currency yet, 33% are considering it, viewing efficiency in payments (100%) and enhanced financial inclusion (44%) as the biggest benefits of central bank digital currencies (CBDCs). Central bank resilience and gold's defensive role Central banks are reinforcing their reserve management frameworks in response to mounting geopolitical instability and fiscal uncertainty. In the Middle East, 67% plan to increase their reserve holdings over the next two years, while 27% intend to diversify their portfolios. Gold continues to play a critical role in this effort, with 63% of central banks in the region expecting to expand their gold allocations over the next three years. Seen as a politically neutral store of value, gold is increasingly viewed as a strategic hedge against risks such as rising U.S. debt levels, reserve weaponisation, and global fragmentation. At the same time, central banks are modernising how they manage gold exposures. In addition to physical holdings, an increasing number are turning to more dynamic tools, such as exchange-traded funds (ETFs), swaps, and derivatives, to fine-tune allocations, improve liquidity management, and enhance overall portfolio flexibility without sacrificing defensive protection. This is expected to continue, with 21% of central banks globally and 25% in the Middle East saying they plan to hold investments in gold ETFs in the next five years, while 19% worldwide and 25% in the region intend to hold gold derivatives. About Invesco Ltd. Invesco is a global independent investment management firm. Our distinctive investment teams deliver a comprehensive range of active, passive and alternative investment capabilities. With offices in more than 20 countries, Invesco managed $1.84 trillion in assets on behalf of clients worldwide as of March 31, 2025.
Zawya
18-07-2025
- Business
- Zawya
Middle Eastern wealth funds ready to increase investments in China: Survey
Around 60% of Middle Eastern wealth funds are willing to increase their allocations to Chinese assets over the next five years, according to the latest Invesco global sovereign asset management study. The remaining 40% will continue to maintain their investment. Sovereign funds in Asia-Pacific and Africa will be more proactive, with 88% and 80%, respectively, expressing intentions to increase their investments. About 73% of North American funds are open to investing in China. The global funds cited several factors when justifying their increased investments in China, with 71% identifying strong returns made in China, 63% wanting to diversify, and 45% citing increased market access for foreign investors. The most attractive sectors for investment in China were digital technology and software, advanced manufacturing and automation, and clean energy and green technology, the Invesco report said. Martin Franc, CEO of Asia ex-Japan, Invesco, said that respondents approved of supportive policies from Beijing and believed the market was a place where innovative technologies could blossom. 'Their growth story has only a limited amount to do with what happens in the West. So, it is phenomenal for political and capital diversification,' the study reported quoting an unnamed Middle East-based sovereign wealth fund. The study polled 141 senior investment professionals, including chief investment officers, heads of asset classes, and portfolio strategists, from 83 sovereign wealth funds and 58 central banks worldwide, who collectively managed $27 trillion in assets.
