Sovereign wealth funds in the Gulf are recalibrating their external investments

Despite the escalation of geopolitical tensions in the region, recent developments have confirmed that sovereign wealth funds in the Gulf Cooperation Council countries, led by the UAE, will not retreat from their foreign direct investments, but rather will move to re-adjust their strategies to suit the new changes, according to a recent report issued by the “FDI Intelligence” magazine.

Since the outbreak of war between the United States and Israel on one side and Iran on the other on February 28, leading to the temporary ceasefire agreement on April 7, Gulf funds have continued to conclude foreign deals and investments, in a clear indication of the continuation of their global expansionist approach despite the pressures.

Paramount deal

This period witnessed the participation of prominent funds such as the Saudi Public Investment Fund and the Qatar Investment Authority, along with the new Abu Dhabi fund “Imad,” in the Paramount acquisition of “Warner Brothers Discovery,” through a joint investment in shares worth up to $24 billion.

Mubadala and the Qatar Investment Authority also participated in a $575 million financing round for the sports technology company Woop, while the Abu Dhabi Investment Authority established a real estate platform in partnership with the Ardian Group.

In the energy sector, 2 Point Zero, a subsidiary of the International Holding Company, acquired Traverse Midstream Partners for $2.25 billion.

Thoughtful redirection

Experts believe that these deals confirm that what is happening is not a withdrawal from foreign investment, but rather a deliberate redirection. Daniel Brett, head of the research department at Global SWF, explained that Gulf funds are still capable of financing huge international deals, especially those that have reached advanced stages or carry strategic importance.

For his part, Robert Mogielnicki, director of Polysphere Advisory, a geoeconomic consulting firm in Paris, pointed out that exposure to global markets remains necessary as a tool to hedge against regional shocks, especially after the World Bank reduced its growth expectations for Gulf economies in 2026 to 1.3%.

According to the data, four major funds, namely Mubadala, the Abu Dhabi Investment Authority, the Qatar Investment Authority, and the Saudi Public Investment Fund, account for about 60% of the direct investments of sovereign funds globally.

It is expected that foreign investments in the future will focus on sectors that support local development, such as artificial intelligence and energy, but at a more balanced pace. Anshu Vats, a consultant in geopolitics, believes that investments in advanced technology, especially in the United States, will continue, but taking into account the most pressing domestic needs.