Sovereign wealth funds in the Gulf will shine more than ever in the year ahead after increasing investments in Western economies by $51.6bn according to Global SWF’s annual report.
According to the report five of the 10 most active sovereign wealth funds in 2022 were based in the Gulf.
Singapore’s GIC topped the list, but was followed by the Abu Dhabi Investment Authority and Saudi Arabia’s Public Investment Fund.
Also in the top 10 were Abu Dhabi’s Mubadala Investment Company and holding company ADQ, followed by the Qatar Investment Authority.
Other investment authorities in Singapore and Canada filled out the top 10.
Gulf firms dominate SWF activity list
- GIC of Singapore invested $40.7bn
- ADIA of Abu Dhabi invested $25.9bn
- PIF of Saudi Arabia invested $20.7bn
- Temasek of Singapore $13.5bn
- CPP of Canada invested $12.1bn
- Mubadala of Abu Dhabi invested $11.3bn
- CDPQ of Canada invested $10.3bn
- ADQ of Abu Dhabi invested $8.7bn
- OTPP of Canada invested $7.9bn
- QIA of Qatar invested $7.1bn
The GlobalSWF report said: “In the global context of geopolitical, economic, and financial uncertainty, Middle Eastern funds are shining more than ever.
“Most funds have shattered stereotypes of following hidden agendas and only hunting trophy assets and are now recognised as smart, flexible, and mature investors that can move the needle locally and overseas.
“The 40 Middle Eastern SOIs manage $4.8tn in financial capital and 12,000 personnel in human capital.”
Strong oil prices and a peg to the over-performing dollar were key drivers behind the busy year for sovereign wealth funds in the Gulf.
Of this year’s 60 mega-deals, (tickets deployed by sovereign investors of $1bn or more), 26 were carried out by Middle Eastern SWFs, and 17 of them were in American or European assets.
The largest commitment was made by ADIA, when it invested $4b in Ardian’s fund ASF IX and $2bn for joint co-investments.
The report also recognised the emerging strength of the Middle East IPO market.
It said: “While US markets have plummeted, Middle East bourses went from strength to strength. In 2022, the Gulf saw over 50 IPOs raised more than $20bn, the highest ever if we remove Aramco’s listing in 2019.
“Some of the largest listings, including DEWA in Dubai and Borouge in Abu Dhabi, attracted significant capital from SOIs. The region expects the IPO boom to continue in 2023 across Tadawul, ADX, and DFM exchanges.”
Looking ahead to 2023 and beyond, GlobalSWF analysts say Middle Eastern sovereign investors will continue to seek out investment opportunities Europe and North America, where there will be more opportunities to buy listed equities or direct stakes.
Sovereign wealth funds are state-owned investment funds which comprises of money generated by governments through their surplus reserves.
Sovereign wealth funds, which obtain their funds from state-affiliated sources, invest their funds into shares and bonds.
These funds also help strengthen a country’s economy, with citizens benefitting from it.
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