Gulf sovereign wealth funds show no signs of retreat since Iran conflict
The takeover of Warner Bros Discovery by Paramount, which is backed by the Saudi Public Investment Fund, the Qatar Investment Authority and Abu Dhabi’s newest fund L’Imad, is a sign that Gulf sovereign wealth funds are not retreating (Chris Torres/EPA)
The signs are that the Gulf Cooperation Council’s sovereign wealth funds have not retreated from their foreign investment drive since the start of the Iran conflict, despite warnings they are reviewing commitments overseas.
But they are tipped to recalibrate future strategies by narrowing their focus to strategic industries that boost domestic capabilities and allocating more capital to defence and infrastructure at home.
Between the start of the US-Israeli military operation against Iran on February 28 and their temporary ceasefire agreed April 7, Gulf sovereign investors have made at least a handful of foreign investment commitments amid reports that officials are reconsidering deals.
Paramount has confirmed that Saudi Arabia’s Public Investment Fund, Qatar Investment Authority and Abu Dhabi’s newest fund L’Imad are investors in its takeover of Warner Bros Discovery through an equity syndication that gives them minority, non-voting stakes in the target. According to WSJ reports the equity commitments amount to $24bn.
Meanwhile Mubadala and QIA have participated in a $575mn fundraising by US sports tech company Whoop, and Abu Dhabi Investment Authority established a real estate platform with French private equity group Ardian.
Robert Mogielnicki, who runs Paris-based geoeconomic consultancy Polisphere Advisory, said Gulf SWFs will “continue to hunt for promising deals in global markets”.
International exposure is critical for “hedging against regional shocks” he says — a strategy primed for use given the World Bank on April 8 cut the GCC’s 2026 growth forecast by 3.1 percentage points to 1.3 per cent.
Gulf SWFs have dominated the global industry’s pivot away from portfolio investments, and towards owning stakes in foreign assets and private companies. Four of them — Mubadala, Adia, QIA and PIF — collectively account for around 60 per cent of SWF direct investments globally, according to latest figures tracked by IE University.
Tihir Sarkar, a partner at Cleary Gottlieb, says Gulf SWF deal execution has slowed, but that the pace and nature of requests for proposals has not changed since the war began. “[This] is in part due to surplus of capital that these funds can deploy internationally”, he adds.
Indeed, Gulf governments have rebuffed reports that SWF divestments and cancellations of investment pledges are on the table. In a statement, a UAE Ministry of Foreign Affairs spokesperson said the country’s economic strategies enhance its capacity to absorb geopolitical pressures, meaning “there is no change to investment plans”.
But geoeconomics adviser Rachel Ziemba echoes others in saying “it seems undeniable” there will be shifts in capital allocations, given lower oil revenues detract from domestic investment and drone attacks have damaged critical infrastructure and rattled safe-haven perceptions.
Foreign investments are tipped to focus on sectors that align with domestic development priorities. For example, geopolitics adviser Anshu Vats believes Gulf SWFs will continue investing in US artificial intelligence, but with allocations “moderated to meet more urgent requirements” in the Gulf region.
Local industries expected to attract more SWF capital include energy infrastructure, including pipelines — which helped keep Saudi oil flowing during the Strait of Hormuz’s effective closure — and defence.
Ziemba sees particular interest from UAE and Saudi Arabia in strengthening their defence industrial bases, with both countries plus Qatar signing defence co-operation agreements with Ukraine in March.
Be it at home or abroad, she believes the war will “reinforce a shift already under way to more strategic investments … and away from primarily passive investments.”
Danielle Myles is senior editor at fDi Intelligence, a sister title of AOX which this article originally appeared in