Skip to content Skip to Search
Skip navigation

Kingdom Holding bucks European investment exit trend

M&G's headquarters in London
  • UK company M&G Plc has $370bn in assets under management
  • 40% of Middle East investors reduce spend in Europe
  • Russia-Ukraine war leads sovereign investors to look further afield

Saudi Arabia’s Kingdom Holding Company is investing $269 million in British insurance and asset management firm M&G Plc, despite the trend towards Middle East sovereign wealth funds backing away from Europe.

M&G has over $370 billion in assets under management.

Kingdom is part-owned by Saudi Arabia’s Public Investment Fund (PIF), manages a global portfolio of assets worth more than $13 billion, and has stakes in household names such as Citigroup, Accor, Uber and Twitter.

It said the investment was part of its strategy to diversify its “exposure in new and promising sectors”.

The announcement comes despite the latest Invesco Global Sovereign Asset Management Study, which surveyed chief investment officers at 63 sovereign wealth funds and central banks in the Middle East, found that 40 percent of respondents said they plan to reduce allocations to developed countries in Europe this year. 

Of the remaining 60 percent, half said their allocations would remain the same, while 10 percent said it would increase.

This compares to 2021 when just 12 percent said they would decrease exposure, with 88 percent saying it would stay the same.

Clothing, Apparel, Face
Prince Alwaleed, CEO, Kingdom Holding Company, has also invested in Twitter and Uber

In terms of cash flow, 70 percent of Middle East respondents said they would increase their investment in North America, compared to 12 percent who said the same in 2021 and 38 percent planning to reduce their American portfolio.

Russia-Ukraine war rattled Middle East investors

Rod Ringrow, London-based head of official institutions at Invesco, told AGBI he believed Russia’s invasion of Ukraine in February had rattled some Middle East sovereign investors and they were therefore looking to move their investments further afield.

“The US has always been a major destination for the Middle East sovereignty for investment,” he said.

“I would read it as they’re comfortable putting more emphasis back in the US, and also away from the conflict zone, but also looking at the economies that are more likely to be impacted by energy issues and supply chain issues over the next twelve months.”

The Invesco report also quoted an unnamed Middle Eastern development sovereign as saying that European investments had been seen as “cheap prior to the invasion”, but it was now focusing “more on political risk” when making its valuations.

Diego Lopez, managing director at Global SWF, a New York-based advisory specialising in sovereign wealth funds, disagreed with the Invesco survey finding and said recent currency fluctuations have had an impact.

The British pound has fallen from £1.37 against the US dollar in January to £1.18 this month.

“I don’t necessarily agree with that observation – the fall of the euro (and of the sterling) is presenting good opportunities in Europe, including the UK at the moment and we have started seeing a renewed interest by SWFs there,” Lopez said.

“This is especially true among Middle Eastern funds, which traditionally have stronger ties with Europe.”

However, Invesco’s Ringrow remained unconvinced: “They’re big supertankers of investment, they don’t switch quickly. They’re long-term investors,” he said, adding they wouldn’t be swayed by “short-term currency movement”.

Latest articles

Oman UAE deals Sultan of Oman president of UAE

Oman and UAE sign deals worth $35bn

The UAE and Oman have announced a host of new commercial and business deals worth a total of AED129 billion ($35 billion). The partnerships were agreed during Monday’s state visit to the Emirates by the ruler of Oman, Sultan Haitham bin Tariq al Said.  Investment and collaboration agreements covered areas including renewable energy, green metals, […]

A silver trader in his shop in Ahmedabad, India. India is sourcing an increasing amount of its silver from the UAE

India’s silver imports from UAE on the rise

Supplies of silver to India from the UAE have increased this year, as the Emirates’ exporters benefit from an agreement signed between the countries two years ago. The India-UAE comprehensive economic partnership agreement signed in 2022 has significantly boosted imports, according to a report by Indian English-language business newspaper The Financial Express.  The UAE route […]

A worker at Al Faw Grand Port. The Development Road project aims to connect the port with Turkey

Gulf to collaborate on $17bn Suez Canal road and rail rival

The $17 billion “Development Road” project is moving ahead after the UAE, Iraq, Qatar and Turkey signed a quadrilateral cooperation agreement.  The road and rail collaboration aims to tie the Al-Faw Grand Port in Iraq’s oil-rich south to Turkey, thereby shortening travel time between Asia and Europe in a bid to rival the Suez Canal. […]

A flooded residential area in Dubai. New drainage infrastructure should be nature-based, say experts

Concrete or sponge? Dubai’s post-flooding options

In the wake of last week’s floods, retrofitting Dubai with traditional, concrete-based drainage systems would be expensive, time-consuming and complicated. As an alternative, authorities should look to nature-based solutions, industry professionals told AGBI. “Dubai should not repeat the mistakes that have been made in most of the Western world,” said Ronny Berndtsson, professor in water […]