A new report highlights the aggressive investment strategies of the Gulf Cooperation Council (GCC) sovereign wealth funds, which executed 126 deals worth $55 billion in the first nine months of 2024, representing 40% of global transactions. The GCC includes Saudi Arabia, UAE, Qatar, Kuwait, Oman, and Bahrain. These nations collectively manage $4.9 trillion in assets, projected to exceed $5 trillion by early 2025 and possibly reach $7 trillion by 2030.
The investment surge is led by the "Big Five" in the GCC region: Abu Dhabi's Investment Authority (ADIA), ADQ, Mubadala, Saudi Arabia's Public Investment Fund (PIF, Financial), and Qatar's Investment Authority (QIA). Particularly notable is Saudi Arabia's PIF, which saw a 29% growth in assets to $765.2 billion in 2023 by investing heavily in local infrastructure and real estate projects.
GCC sovereign funds maintain strong investments in traditional markets like the US and UK, contributing $18.9 billion and $9.5 billion, respectively, while swiftly rising in emerging markets such as China with $9.5 billion. These funds have become a stable force in regional and global financial landscapes.
Saudi Arabia stands as the largest economy in the GCC, contributing half of the $2.2 trillion economic activity in the region. By 2029, Saudi's GDP is anticipated to reach $1.43 trillion, comprising 51% of the GCC's GDP, driven by growth in non-oil sectors aligned with the Saudi Vision 2030, aimed at reducing reliance on oil and gas by promoting tourism, entertainment, and renewable energy industries.
The GCC's financial markets are also expanding, with seven active stock exchanges and 877 listed companies, totaling a market value of $4.3 trillion. Over the past six years, GCC countries have attracted significant foreign direct investment (FDI), with 84% flowing into Saudi Arabia and the UAE. The GCC now accounts for 4.2% of global FDI inflows, up from 1.3% in 2019. Saudi Arabia aims to increase FDI to 5.7% of its nominal GDP by 2030, targeting $100 billion annually in foreign investment.
Additionally, GCC sovereign wealth funds are proactively issuing sustainable bonds, with Saudi Arabia and the UAE raising $16.7 billion in the first nine months of 2024. The PIF is at the forefront in this sector, having raised $3 billion for environmental projects. Islamic bonds (sukuk) now constitute 35% to 40% of the region's sustainable bond issuance.
Sovereign wealth funds in the region are also actively pursuing bilateral investment agreements, especially post-pandemic. Saudi Arabia's PIF has established subsidiaries in Egypt and Iraq, while UAE's Mubadala has launched national investment plans to strengthen economic ties with countries like France and the UK.
