The UAE sovereign wealth funds are outpacing their GCC counterparts, with their combined assets under management (AUM) projected to hit $2.2 trillion by the end of 2024, according to data provider and consultancy Global SWF. Saudi Arabia follows closely with an AUM of $1.12 trillion.
The AUM of GCC SWFs, including the “Oil Five,” is expected to surge to $7.3 trillion by 2030, with investments in the first nine months of 2024 totaling $55 billion. The ‘Oil Five’ comprises the Abu Dhabi Investment Authority (Adia), ADQ, Mubadala, Saudi Arabia’s Public Investment Fund, and the Qatar Investment Authority. These funds were involved in 126 transactions during the first nine months of the year, accounting for approximately 40% of all global deals by state-backed investors, matching 2023 levels.
Currently, GCC SWFs manage $4.9 trillion in capital, set to surpass $5 trillion in early 2025 and reach $7.3 trillion by 2030. Their total AUM is forecast to exceed $10.2 trillion by the end of the decade. The seven GCC stock exchanges list 877 companies with a combined market cap of $4.3 trillion, 70% of which is owned by state or state-owned investors, according to Global SWF.
Mubadala, Abu Dhabi’s second-largest wealth fund, reported a 9.5% increase in AUM to $302.2 billion in 2023. The fund invested Dh 89 billion in sectors such as technology, digital infrastructure, life sciences, renewable energy, and private credit. Its portfolio remained consistent year-over-year, with 38% in private equity, 25% in public markets, and 16% in real estate and infrastructure. Mubadala partnered with Global Infrastructure Partners in May to invest in Perdaman’s $4.2 billion Western Australia Urea project.
Global SWF notes that while the majority of GCC SWFs’ investments were directed towards the US and the UK, China has attracted $9.5 billion in capital. This influx comes as Western investors retreat due to regulatory challenges, market volatility, and economic slowdown. Diego Lopez, founder of Global SWF, highlighted that sovereign investors like Adia have traditionally invested over 50% of their portfolio in the US but are increasingly diversifying into the East, particularly China and India.
Royal Private Offices (RPOs) have expanded notably in the UAE, with Global SWF identifying 35 major GCC RPOs managing $500 billion in investments. GCC state-owned investors leverage additional inflows to make strategic investments in advanced and emerging markets across the Americas, Europe, and Asia. Sovereign funds reached a 15-year high in global deal-making in the first half of 2024, deploying $38.2 billion across 58 deals.
The surge in Gulf sovereign investments began with the Covid-19 pandemic. Saudi Arabia’s Public Investment Fund (PIF) remained the most active sovereign fund in the first half of the year, driven by government asset transfers. PIF and private equity firm Ardian jointly acquired a 22.6% and 15% stake in London Heathrow Airport for $4.3 billion, while the Qatar Investment Authority holds a 20% stake. PIF also agreed to acquire a 49% stake in Rocco Forte Hotels in December, expanding its presence in luxury hospitality across Europe.
