War or peace, Gulf wealth funds keep investing

Gulf sovereign wealth funds kept deploying capital in Q1 despite the war, data show

Gulf sovereign wealth funds maintained deal activity in the first quarter even as nearly a third of the period took place during the war, with Saudi Arabia’s Public Investment Fund (PIF), Abu Dhabi-based Mubadala and the Qatar Investment Authority together committing almost $25 billion in new investments, according to data from consultancy Global SWF reviewed by Semafor.

“We may see funds … act opportunistically, identifying bargains in certain geographies and segments,” Diego López, founder and managing director of Global SWF, said, adding that Saudi Arabia’s PIF did that during the pandemic and “we now see Mubadala as a well positioned SWF to take advantage of the market dislocation.”

The resilience of Gulf capital reflects the sheer scale of the region’s war chests: the largest sovereign funds in Kuwait, Qatar, Saudi Arabia and the UAE currently hold about $5 trillion in assets, a pool Global SWF expects to grow to almost $18 trillion by 2050. Still, analysts warn the pace of overseas deployment could slow if the conflict persists, as funds are increasingly asked to support domestic priorities.

Global SWF data show that almost 60 percent of Gulf sovereign funds’ foreign investments over the past five years have flowed into financial services, infrastructure and technology, with the United States taking a growing share. Recent transactions indicate investors are not abandoning prior commitments: Gulf-linked capital has been tied to deals involving OpenAI and Anthropic, and to investments in companies such as Electronic Arts and Paramount Global.

• Companies linked to Abu Dhabi Deputy Ruler Sheikh Tahnoon bin Zayed Al Nahyan joined a funding round for the fitness band startup Whoop, which has a reported $10 billion valuation.
• Those same interests agreed to buy Oklahoma-based Traverse Midstream Partners for $2.25 billion.
• A Sheikh Tahnoon-led firm bought a majority stake in a UK hospitality group reportedly valued at more than £1 billion ($1.3 billion), including The Ivy and private members’ club Annabel’s.

Observers say funds could also redirect capital to shore up industries hit by the conflict. López noted that some sovereign investors — including the Abu Dhabi Investment Authority and the Kuwait Investment Authority — might be tapped to support government budgets and slow private-market investments. He pointed to potential support for aviation and domestic military companies such as EDGE in the UAE, and SAMI, SAFE and Barzan in Saudi Arabia and Qatar.

Economic forecasts underscore the pressures facing the region. The World Bank now expects Gulf growth to slow to 1.3 percent this year from 4.4 percent in 2025; Gulf officials have estimated tourism losses of as much as $32 billion, and the World Bank expects the Kuwaiti and Qatari economies to contract by more than 5 percent.

Looking ahead, experts see two likely paths. Some funds may slow allocation decisions as governments prioritize defense, stimulus and reconstruction — a scenario Karen E. Young, senior research scholar at Columbia University’s Center for Global Energy Policy, summarises by warning sovereign wealth funds may “take longer to make allocation decisions.” Others, López said, could move opportunistically to buy distressed assets if market dislocations deepen, suggesting the flow of Gulf capital into major global markets will adapt rather than stop.