GCC SWFs manage close to $4 trillion assets

Sovereign Wealth Funds (SWF) in the UAE accounted for 62 per cent of the total $74 billion capital deployed in 2022 by the GCC state-owned funds that are managing close to $4 trillion worth of assets, according to S&P Global Market Intelligence.

Five of the world’s 10 biggest spending state-owned investors (SOIs) of 2022 were from the GCC and they deployed approximately $74 billion on aggregate last year, according to Global SWF.

As of June 2023, the largest sovereign wealth fund by assets under management (AUM) was the CIC. Located in China, the CIC, or the China Investment Incorporation, managed roughly $1.4 billion of assets. The next highest-ranking SWF is Abu Dhabi Investment Authority (Adia) managing assets worth $993 million.

Out of these five GCC SOIs, the UAE accounted for 62 per cent of total capital deployed in 2022 through three funds— Adia, Mubadala, and ADQ. They were followed by Saudi Arabia with 28 per cent (through the PIF), and Qatar with 10 per cent (through QIA), as per the same source, wrote Jamil Naayem, principal economist, Middle East and North Africa, S&P Global Market Intelligence.

The size of GCC SWFs, including all the Global SWF-listed sovereign wealth funds out of the UAE, Saudi Arabia, Qatar, Kuwait, Bahrain, and Oman, grew by 18 per cent in 2022 by AUM. Today, GCC SWFs account for roughly 37 per cent of global SWF AUMs and are practically equivalent in size to all peers in Asia, Latin America, and Sub Saharan Africa combined, said the S&P economist.

Among the 10 largest SWFs around the world, five are in the GCC region. Saudi Arabia’s PIF, the Abu Dhabi Investment Authority, the Kuwait Investment Authority (Kia), the Qatar Investment Authority (Qia), and the Investment Corporation of Dubai (ICD) hold combined assets under management estimated at $3.3 trillion, according to Global SWF, said Naayem.

“Contrary to the global financial crisis era, GCC SWFs argue that they are pursuing strategic buys rather than opportunistic buys, in line with their long-term national visions. They played an important role domestically in supporting and stabilising their banking systems during and after the global financial crisis. They are now much larger than they were 15 years ago, but also more experienced with increasingly sophisticated asset allocation strategies,” said Naayem.

The report said investments realised by GCC sovereign investors surged by 27 per cent during 2020, at the start of the Covid-19 pandemic, to $49 billion, as the GCC snapped up distressed assets and stakes in hard-hit companies and sectors.

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