GCC attracts growing level of global capital

Pexels/Mikhail Nilov

• Saudi Arabia garners $10bn
• UAE is second with $2.1bn
• Capital ready to deploy quadruples

Members of the Gulf Cooperation Council are emerging as prime destinations for capital deployment from across the world, as countries in the GCC look to domestic investment opportunities to fund growth beyond hydrocarbons.

Private capital assets under management (AUM) in the countries that make up the GCC hit $12.3 billion in 2022, from $1 billion in December 2008, a report from Preqin, a data tracker, has revealed.

Saudi Arabia took the bulk of this, at $10 billion, followed by the UAE, with AUM of $2.1 billion.

• Saudi Arabia set for FDI top 20 after Misa revises measures
• Riyadh to host first GCC-Asean investment summit
• Dubai launches $136 million venture capital fund

The report revealed that a change in investor sentiment towards the region has attracted money into venture capital funds, with capital ready to deploy quadrupling from $400 million in December 2021 to $1.63 billion at the end of 2022. 

This includes deals completed by international investors such as Blackstone, CVC Capital Partners, Silver Lake and Apollo.

There were now 529 active general partners in GCC member countries, almost double the 268 who were in the region in 2018, the report said. 

Under the structure of each private equity fund, general partners manage the fund and pick which investments they include in their portfolios.

According to the report, 142 funds in the GCC raised a total of $6.5 billion between 2018 and 2023.

Of this, 23 venture capital funds closed with aggregate capital raised of around $2.5 billion; 81 real estate funds closed between September 2021 and September 2023, raising $2.3 billion; and 38 private equity funds closed between 2018 and 2020 with an aggregate raise of $1.7 billion.

Middle East-based sovereign wealth funds were found to have combined AUM of more than $3.7 trillion as of March 2023. 

Average allocations to alternative assets such as private equity and venture capital in 2022 surged to 44 percent of AUM in December 2022, up from 22 percent in December 2021, Preqin said.