Chart Watch: Six Mid-East asset owners making a push in Asia
Sovereign wealth funds. Family offices. Hedge funds. Equity funds. Asset managers.
Several large investors in Asia are eyeing the Middle East -- and investors from that part of the world are eyeing Asia with equally intensifying interest.
The latest story to hit the news is that Sheikh Ali Al Maktoum, nephew of Dubai ruler Sheikh Mohammed Bin Rashid Al Maktoum, is opening a family office in Hong Kong, opening the door for investments in the region.
Cross-border investment activity from the Middle East to Asia has gained momentum, with total cross-regional private capital deal value cumulatively reaching $83 billion since 2020 to 2023, compared to $14 billion from 2016-2019, according to a February 2024 report by Global Private Capital Association.
"Gulf sovereign wealth funds (SWFs) are increasing direct dealmaking across Asia, seeking more control and diversified exposure, while maintaining partnerships with select top-performing managers.
"Standalone LP [limited partner] direct deals have accounted for 39% of capital deployed in all Asia private capital deals that include a Middle East investor,” the report noted.
As Middle East governments seek to diversify their economies, SWFs are deploying billions into electric vehicle manufacturing, renewable energy projects and digital infrastructure in Asia, the GPCA report noted.
UAE, SAUDI ARABIA IN THE LEAD
Saudi Arabia’s Public Investment Fund (PIF) is fast becoming the dominant player among the mega-funds, making big investments in high profile industries and sports franchises.
PIF was the leading private markets investor globally in 2023, according to Global SWF, a SWF tracker, with $31.5 billion deployed in 48 deals, 33% more than in 2022.
A PIF executive, Yazeed al Humeid, was also named in AsianInvestor’s Top 10 Sovereign Wealth Fund Executives in Asia because Middle-East SWFs, with billions of dollars in assets, are becoming active investors in Asia and we believe their influence is only set to intensify in coming years.
The wealth fund has become a rapidly rising star in the global SWF universe after its restructuring in 2015 transformed it into a sovereign powerhouse charged with developing emerging growth sectors and bringing in foreign partnerships and investments.
Other big Middle East SWFs investing in Asia include Abu Dhabi Investment Authority and Qatar Investment Authority.
Entities from the United Arab Emirates -- of which Abu Dhabi and Dubai are a part of -- and Saudi Arabia, in particular, are leading the investment push in Asia.
A surge in investing interest from state-owned institutions and sovereign wealth funds in the Middle East in Asia has also sparked the interest of family offices, industry experts told AsianInvestor.
Meanwhile, Asian instituional investors, such as investment managers are looking at the Middle East as a source of funding, leading many to expand operations to the region.
Hong Kong-based Arte Capital, a multi-asset strategy manager, for instance, inked a deal in December with the Abu Dhabi Investment Office to set up its regional headquarters in Abu Dhabi and launch a $1 billion fund for Chinese companies expanding in the Middle East.
Chinese private equity managers, facing waning interest from US and European investors, are also increasingly engaging with Middle Eastern SWFs to secure funding, AsianInvestor reported earlier this year.