A report by the Financial Times anticipates that sovereign wealth funds in the Middle East will outpace their global counterparts in spending for the fourth consecutive year, capturing 40% of total inflows, despite a decline in oil prices.
During the first three quarters of this year, sovereign investment funds in the Middle East and North Africa have spent approximately $56.3 billion, a figure on par with the spending during the same period in 2024, according to estimates from Global SWF, a research consultancy specializing in sovereign investments.
This news follows shortly after a consortium backed by Saudi Arabia’s Public Investment Fund secured a $55 billion deal to acquire Electronic Arts, a company known for its video games. The robust investment activity among sovereign wealth funds in the Middle East, particularly in the Gulf nations, persists even as Brent crude prices have averaged $69.93 per barrel this year, down from $81.82 during the first nine months of 2024.
Since 2022, Gulf sovereign wealth funds have led in overseas investment spending, largely driven by the surge in energy prices following the Russia-Ukraine conflict. Data from global sovereign wealth funds indicate that their financial health remains strong despite the fall in oil prices.
Diego Lopez, managing director and founder of Global SWF, noted that the findings revealed that the impact of declining oil prices has not been uniform across nations, with many still enjoying strong financial positions. He stated, “Four out of six Gulf Cooperation Council countries continue to register surpluses.” Continuous inflows to sovereign wealth funds necessitate effective investment strategies, one of the reasons these funds maintain a proactive approach in the markets. Global SWF’s estimates are based on publicly available information, as Gulf sovereign wealth funds typically do not release quarterly data.
During the first nine months ending in September, Mubadala emerged as the highest spender, allocating $17.4 billion according to Global SWF’s estimates. Following Mubadala, the Abu Dhabi Investment Authority spent $9.6 billion, while the Qatari sovereign wealth fund’s expenditure amounted to $7.6 billion. Lopez remarked that Mubadala, which invests across both developed and emerging markets, is “active everywhere all at once.” The company, valued at $330 billion, previously announced a plan to increase its investments by one-third in 2024 to reach $32.4 billion.
The strong spending from Gulf sovereign wealth funds comes even as the Saudi Public Investment Fund — a massive investment vehicle in the region worth $925 billion — announced its intention to focus on domestic investments, with only one-fifth of its allocations directed overseas. Lopez commented that even with 80% of the Public Investment Fund’s portfolio dedicated locally, there remains about $200 billion available for investments in other countries, indicating that they continue to be “very active investors abroad.”