To the point 

• The potential future outlook for SWFs and why focusing on Asia now may define their strategic direction.
• GCC SWFs are expanding to diversify beyond oil and building long-term resilience. 
• Asia’s fast-growing markets offer major opportunities in tech AI and sustainability. 
• Investment in Africa boost both returns and geopolitical influence

Introduction

During the 2008 global financial crisis, GCC SWFs had a reputation as lenders of last resort, supporting large Western financial institutions. They acquired distressed iconic assets across the United Kingdom and France and provided a stable source of capital across industries in Europe and the United States.

Forged from the region’s vast oil and gas revenues, these colossal pools of capital have long been a familiar presence on the global financial landscape for decades, but their attention was largely on the developed and stable economies of the West. As they grow in size and influence, however, that traditional focus on the transatlantic axis is evolving into a multipolar strategy that looks with equal measures of ambition and purpose to the dynamic economies of Asia, Africa, and beyond.

Today, the GCC SWFs collectively manage almost US$6 trillion in assets under management, more than 40% of the global total, according to Global SWF¹. That growth trajectory is expected to continue, making them a dominant force in the world of global finance. Abu Dhabi’s Mubadala was the largest sovereign-owned investor globally last year, deploying US$29 billion across 52 deals, a 67% increase from the previous year².  

Driven by economic and geopolitical imperatives, GCC SWFs are leveraging this financial power to expand their political influence, emerging as proactive, purpose-driven investors targeting future-focused sectors from biotech to AI. Their rise is part of a global trend: the number of SWFs worldwide has more than tripled since 2008, with assets exceeding US$14 trillion³. Both the size and number of deals are trending upward, reinforcing the GCC’s push toward new investment frontiers.

This increased global competition is reinforcing the GCC’s push toward new investment frontiers. Burgeoning trade ties with India and China are creating new opportunities for state-owned GCC investors seeking exposure to high-growth economies.  GCC SWFs are increasingly partnering with the investment vehicles and programs of host nations, opening representative offices and building enduring alliances that bolster both their diplomatic and financial clout.

The Middle East’s much-vaunted ‘pivot to Asia’ is easy to overstate.

Yes, GCC SWFs are allocating more capital to Asia: Saudi Arabia’s Public Investment Fund (PIF) signed memoranda of understanding worth US$50 billion with six Chinese firms last year⁴. China’s Dahua Technology signed a deal with PIF’s Alat to create a US$200 million manufacturing hub in the kingdom⁵. There are many examples, but these investments continue to be eclipsed by capital deployments in developed economies.

Take Mubadala, for example. Around 85% of the capital it deployed last year went to developed markets. Out of those, 57% went to the United States, according to Global SWF⁶. Meanwhile, PIF took stakes in London’s Heathrow⁷ airport and iconic luxury retailer Selfridges⁸

The trend is clear: while the United States and the United Kingdom remain preferred destinations, GCC SWFs are fundamentally evolving, and their geographical expansion is poised to accelerate.

This article examines the forces driving this shift and their implications for the future. 

The strategic imperative: Why are GCC SWFs expanding

Historically, GCC SWFs pursued a straightforward strategy. They acquired prestige assets in London and other global financial hubs and seek stable, passive returns. Saudi Arabia focused on US Treasury bonds,⁹ supporting both the dollar and long-standing economic alliances¹⁰ .

For decades, this strategy served its purpose: preserving wealth for future generations. That approach began to evolve as GCC nations developed and younger leaders took the helm, rolling out ambitious plans to transform their economies and prepare for a time after oil.

Building the infrastructure, cities and industries to nurture post-oil economies requires significant investments but is anticipated to generate long-term returns. As part of Vision 2030, Saudi Arabia unveiled real estate and infrastructure projects worth over US$1.3 trillion.¹¹

SWFs like PIF and Abu Dhabi Investment Authority (ADIA) have become primary investment vehicles for these transformations, seeking returns that hedge against oil price fluctuations.  Saudi Arabia, for instance, requires crude above US$90 to cover expenditures this year, according to Bloomberg Economics, while benchmark Brent has averaged just over US$68 this year¹².

The pursuit of higher returns also aligns with broader geopolitical hedging as China and India rise economically. In late 2023, the United Arab Emirates joined the BRICS+, a bloc of emerging economies—including Brazil, India and China—aiming to counterbalance US-led institutions. Concurrently, Western restrictions on GCC investments in some strategic sectors in the West—such as the United Kingdom forcing Abu Dhabi-backed international media institute to dramatically reduce its stake in The Telegraph—are reinforcing this strategic realignment.¹³

Against that backdrop, GCC governments, with vast resources, small populations, and central geographic positions, are leveraging SWFs as instruments to secure a larger role on the global stage

Eastward bound: Tapping into Asia's growth engine

The most dramatic shift has been toward the vast, growing and technologically advanced economies of Asia. India and China, which alone accounted for nearly half the world’s economic growth in 2023, according to the International Monetary Fund’s (IMF) World Economic Outlook¹⁴.

GCC SWFs invested US$9.5 billion into China in September 2024. ADIA and the Kuwait Investment Authority (KIA) are now ranked among the top 10 shareholders in Chinese A-Share listed firms¹⁵. ADIA and Mubadala were part of a consortium that invested US$8.3 billion in China’s biggest mall manager¹⁶ .

Investments are also flowing into India and Southeast Asia, targeting sectors like tech and AI, logistics, infrastructure, and renewables.

Where once they oversaw their global investments from offices in London and New York, GCC SWFs are increasingly setting up representative offices in China and other key Asian centers.

ADIA announced last year it was opening an office in Gujarat International Finance Tec City to oversee current and future investments in India.

It’s been particularly active in Southeast Asia, partnering with the Indonesia Investment Authority on the Trans Java Toll Roads platform¹⁷and joining a consortium that acquired Malaysian Airports Holdings in February¹⁸ .    

Asia will likely see more investment as trade surges. The Asia House think tank predicts GCC trade with emerging Asia will rise from US$450 billion in 2023 to US$680 billion in 2030. GCC-China trade is expected to surpass combined trade with the United States, the United Kingdom and Western Europe by 2027¹⁹ .

Strategic agreements like the UAE-India CEPA (Comprehensive Economic Partnership Agreement) further facilitate capital flows, and it seeks to replicate this in Southeast Asia.

GCC SWFs are also increasingly co-investing with counterparts across Asia and co-investing in Africa in mutually beneficial strategic opportunities.

Investment diplomacy takes precedence in Africa

Strategic considerations drive GCC investments in Africa, spanning ports, mining, renewables, and agribusiness. State-owned GCC companies are boosting their presence, propelled by a race for resources, food security and political influence.

In 2023, GCC investments in Africa exceeded US$50 billion, with the United Arab Emirates emerging as the fourth largest direct investor. DP World, a global logistics and port operator headquartered in Dubai, United Arab Emirates, operates seaports in Angola, Djibouti, Egypt, Morocco, Mozambique, Senegal, and Somaliland.

Egypt has become a major focus. Last year, Developmental Holding Company (ADQ) led a US$35 billion investment, including rights to a mega-project at Ras El Hekma on the North Coast²⁰. In May, Abu Dhabi Ports Group partnered with the Suez Canal Economic Zone to develop an industrial and logistic park near Port Said. Qatar Investment Authority (QIA) has also partnered on renewable energy projects in South Africa.

While the volume is yet to match Asia, by collaborating with platforms like the African Sovereign Investors Forum and Africa50, a pan-African infrastructure investment platform, GCC SWFs are embedding themselves in the continent's development story, building enduring partnerships that promise both financial and strategic dividends.

The US Presidency factor: A catalyst for re-engagement

Looking West, the GCC’s strategic relationship with the United States continues to evolve, with the current US Presidency proving potentially pivotal.

Nevertheless, the messaging and focus on future-forward sectors like AI and data centers, reflects an alignment of interests beyond the usual emphasis on oil and defense. For the United States, the deals are a source of capital for technology and infrastructure sectors, bolstering the “America First” policy. For the GCC, they preserve a critical political alliance and secure access to cutting-edge innovation and expertise.

In this sense, US policy shifts, while disruptive, could be a catalyst in transforming the country from a passive holding location to a strategic investment partner. How this geographical expansion plays out in the coming years remains to be seen, but one thing is certain, GCC SWFs are set to play a bigger role than ever in the creation of wealth from Riyadh to Cairo to Beijing.