Gulf wealth funds are preparing to expand their global presence

S & P Global Market Intelligence Agency said in a report that the continued generation of foreign currencies will allow GCC sovereign wealth funds to expand their spread in global markets in the next few years.

GCC governments benefited from enhanced hedging liquidity during the greater part of 2022, thanks to an increase in energy-derived revenues in the wake of the Russian invasion of Ukraine and international sanctions on Russia.

The GCC current account surplus is also expected to reach 9% of GDP in 2023 and 6% of GDP in 2024.this means that funds will continue to flow into deep-pocketed sovereign wealth funds, providing additional investment opportunities domestically and abroad.

Currently, regional sovereign funds are seeking to expand their global presence by investing in various geographies and sectors, especially in India, China and other Asian countries, driven by deepening economic, trade and diplomatic relations.

According to Global SWF, the assets of regional sovereign funds under management (AUMs) have grown by an average of 20% in the past two years, reaching about 4 trillion dollars.

Five of the 10 largest investments in the world on behalf of state-owned investors in 2022 were from sovereign investors from the GCC countries (62% from the UAE, 28% from Saudi Arabia, 10% from Qatar).

“It seems that GCC sovereign wealth funds have become a trend for investors in difficult times,” S & P said, adding that state-owned investors in the GCC, including sovereign wealth funds and public pension funds, deployed about USD 83 billion of new capital last year.