The tentative merger agreement announced in June between the PGA Tour, DP World Tour, and LIV Golf sent shockwaves through the sporting world. The commercial operations of the three organizations are set to form a “new collectively owned” entity exclusively funded by Saudi Arabia’s Public Investment Fund (PIF). The PIF will reportedly acquire a significant minority stake in the yet-to-be-named for-profit company by injecting an estimated $3 billion into it.

The controversial merger deal, which some have described as “Saudi Arabia’s de facto takeover of professional golf,” has provoked two separate inquiries in the United States Senate and is seen as the latest effort by the kingdom to implement its ambitious tourism and investment strategy. In fact, sport is but one of 13 “strategic” sectors identified by Saudi Arabia’s sovereign wealth fund (SWF).

Yet succumbing to the temptation to focus narrowly on how the kingdom’s PIF has upended the professional world of golf risks missing the bigger picture: Gulf ruling elites, like their counterparts across the globe, are leveraging their SWFs to proactively drive nation-building projects, fortify strategic international partnerships, and assume a more prominent role on the world stage.

When the COVID-19 crisis struck, Gulf SWFs snapped up stakes in distressed Western companies, capitalizing on market gyrations. As the world struggles to exit from the worst of the pandemic, Gulf SWFs have entered a new phase of dealmaking. Benefiting from massive capital injections derived from higher oil revenue, they have been spending vast sums at home and abroad.

The rise of Gulf SWFs

The number of SWFs around the world has grown steadily over the past two decades, from 62 funds in 2000 to 176 in 2023. During that time, SWF assets under management (AUM) have ballooned from a mere $1 trillion to $11.36 trillion. Four regions dominate the landscape in terms of the number of SWFs and aggregate assets: Europe (specifically Norway and countries in Central and Eastern Europe), North America, Asia-Pacific (specifically China), and the Middle East, with the latter two regions accounting for four-fifths of global assets.

For resource-rich countries such as Gulf oil and natural gas producers, SWFs have emerged as promising tools to save for future generations, mitigate the effects of outsized economic shocks, and/or be deployed as reserve investment and strategic development funds to spend on human, natural, social, and physical capital.

The Gulf is currently home to about 20 SWFs, with at least one such fund originating from each of the six Gulf Cooperation Council (GCC) countries. The various Gulf SWFs differ in terms of the size of their AUMs, investment strategies, as well as approaches to diversification, mandates and objectives, and governance structures. However, they share at least two broad similarities. The first is that the primary source of their funding is surplus revenues generated from the export of commodities, namely oil and gas. Second, they operate under the guidance and oversight of the government or ruling family.

Gulf SWFs have deep pockets — collectively, they manage around $3.7 trillion. According to the Sovereign Wealth Fund Institute, the region’s seven largest funds have combined assets of over $3.2 trillion, amounting to about 40% of global SWF assets (see Table 1).

Table 1: Seven Largest Gulf Sovereign Wealth Funds

Name and Profile of Sovereign Wealth Fund



Abu Dhabi Investment Authority (ADIA)



Kuwait Investment Authority (KIA)



Saudi Public Investment Fund (PIF)



Qatar Investment Authority (QIA)



Investment Corporation of Dubai (ICD)



Mubadala Investment Company (Mubadala)



Abu Dhabi Developmental Holding Company (ADQ



Source: Sovereign Wealth Institute

In most cases, Gulf SWFs are directly controlled by members of the ruling families. Since March 2015, for example, Saudi Crown Prince Mohammed bin Salman has sat at the top of the PIF hierarchy. In March 2023, Reuters reported a reshuffling of wealth fund leadership, with UAE President Mohamed bin Zayed Al Nahyan naming his brother Sheikh Tahnoun — head of ADQ, Abu Dhabi’s third-biggest investment fund — to chair the ADIA. Another brother, Mansour bin Zayed Al Nahyan, leads Mubadala. In this way, Gulf monarchies can maintain close control over how resource wealth is spent and align that spending with their political, public, and personal objectives.

Higher oil prices and ongoing market turmoil are the driving factors behind a windfall for Gulf oil and gas producers. To give just one example of the scale of the oil revenue bonanza, Saudi Aramco reported earnings of $161 billion in 2022, claiming the highest-ever recorded annual profit by a publicly listed company. The financial firepower generated by high oil prices has, among other things, translated into increased spending by the region’s SWFs. The top five funds — Abu Dhabi’s ADIA, ADQ, and Mubadala, along with Saudi Arabia’s PIF and Qatar’s QIA — deployed more than $73 billion in 2022 alone, according to online tracker Global SWF. Jihad Azour, the International Monetary Fund’s (IMF) director for the Middle East and North Africa, maintains that Gulf producers could earn up to $1.3 trillion in additional revenue through 2026.

Patterns and trends in Gulf SWF dealmaking

The current wave of dealmaking by Gulf sovereign funds, which began with the outbreak of the COVID-19 pandemic, features several notable changes in both the pattern and the destination of investments. Gulf SWFs’ spending targets reflect a shift toward alternative assets and “industries of the future,” an acceleration of domestic investments, a growing appetite for global startups, a heightened emphasis on co-investment with private equity (PE) and venture capital (VC) firms, and greater geographic breadth of focus.

Diversifying into alternative assets and industries of the future

Historically, Gulf SWFs have hunted for attractive opportunities in times of volatility and low valuations. However, Gulf wealth investors recently have shifted toward assets that yield returns and generate growth. Instead of parking wealth in low-risk, low-return assets, they have diversified their investments into more profitable areas such as PE and listed shares. Indeed, “alternative assets” constitute a large and increasing share of total assets from the region’s three largest funds.

There is a concurrent shift underway in investment allocation. Gulf SWFs have shown a keen interest in investing in technology and innovation-driven companies, alongside high-priority sectors such as healthcare, logistics, renewables, broadband, and digital infrastructure.

Accelerating domestic investments

The number of strategic funds with a mission to attract foreign investment and co-invest in the domestic economy is increasing significantly. With the exception of ADIA, which solely invests abroad, Gulf SWFs are “flexible funds” that do both. Saudi Arabia’s PIF, one of the largest and fastest-growing sovereign financial investment vehicles, deploys most of its assets domestically, as is generally the case among Gulf SWFs.

PIF is the driving force behind the development of the kingdom’s so-called “giga-projects,” most notably NEOM, the Red Sea Tourism Project, the Qidiyya entertainment city near Riyadh, and ROSHAN. The fund has investments across a wide range of industries, from Saudi Electricity to Saudi Arabian Mining and Saudi Telecom. Since 2017, PIF has established 79 companies across its 13 strategic sectors.

PIF’s big domestic investment push began with the announcement in 2021 of a five-year strategy that aims to more than double the value of its AUM to $1.07 trillion and to commit $40 billion annually to develop Saudi Arabia’s economy until 2025. The fund now owns several strategic investments in the consumer goods and retail sector, such as, Amazon’s Middle Eastern rival and the region’s leading online shopping platform. Recently, PIF agreed to purchase a 30% share of Tamimi Markets Co. in a bid to help transform the company into a national champion and major regional grocery and food supply chain. In February 2023, the fund invested $1.3 billion in four domestic contractors to improve local supply chains for projects in the country.

The fund has set up dozens of fully owned subsidiaries to seek new investment opportunities and launch manufacturing facilities in the kingdom. The recently established Halal Products Development Company aims to localize the development of a wide range of halal products. The newly founded Aseer Investment Company will operate as the PIF’s investment arm, part of an ambitious effort to transform the southwestern region into a global tourist destination. Furthermore, in June of this year, PIF launched Lifera, a commercial-scale contract development and manufacturing organization, to boost biopharmaceutical industry growth.

PIF has also taken steps to develop synergies between its investment holdings and build its global brand. For example, the player jerseys of Newcastle United F.C. — the English Premier League soccer club in which the PIF purchased an 80% stakedisplay the logo of sleeve sponsor

Incubating new industries

Gulf wealth funds have been increasingly active in the global startup scene, mainly in offshore markets. Sanabil, Saudi PIF’s private investment arm, has notably backed a lengthy roster of U.S. startups. At the same time, PIF and China’s Alibaba Group are raising funds to jointly back technology startups in Asia and the Middle East. QIA is leading a funding round for, a platform for businesses to create custom smartphone apps. It has also led and made a follow-on investment in the recent funding round of Singapore-based Insider Pte Ltd (Insider), an AI-enabled digital marketing platform.

According to YourStory, a media tech company for startups, India has emerged as “an investment stronghold” for Gulf wealth funds. QIA has invested in Swiggy (a food ordering and delivery platform), Rebel Foods (an online restaurant chain), VerSe Innovation (a local language tech firm), and Flipkart (an e-commerce company). Abu Dhabi Development Holding Company has pumped millions into Byju (an ed-tech firm) and Spinny (a used car retailing outfit). Lastly, ADIA has purchased stakes in MobiKwik (digital financial services platform) and Jaipur-based DealShare (a social e-commerce startup).

There also seems to be a slow but steady commitment by Gulf wealth funds to startups in the region. ADQ has invested in health-technology company Okadoc, while ADQ and Mubadala, together with the PIF-backed Riyad Taqnia Fund, have provided fresh financing to TruKKer, a startup focused on logistics in the land freight sector. PE rounds in 2022 included PIF’s investments in Almosafer, a travel services provider, and FOODICS, one of the largest cloud-based fintech platforms for restaurants in the Middle East.

Expanding co-investment partnerships

Gulf SWFs are teaming up with other wealth funds or financial investors through joint ventures (so-called sovereign-private partnerships, SPP). These collaborative strategies serve multiple aims, including cost saving, information sharing, and portfolio diversification. Importantly, by utilizing state funds, Gulf SWFs’ engagement in co-investment partnerships aims to bring companies to their shores to support domestic development plans.

An increasing number of Gulf SWF investment partnerships have targeted Asian assets. QIA and ADIA are among the most active co-investors. ADIA, ramping up its exposure to Asia, has teamed up with Singapore’s SC Capital Partners to target data center investments across the Asia-Pacific region. In June, QIA joined a consortium led by Korea’s MBK Partners to invest $1.2 billion in SK On, an electric vehicle battery manufacturer.

Mubadala, too, has formed strategic partnerships. These include forging an alliance with KKR Credit to tap into Asia’s growth potential, joining forces with BlackRock to fund Tata Power Renewable Energy’s aggressive growth plans, and co-leading a $315 million funding round for China’s Hasten Biopharmaceutic. PIF has teamed up with Bain & Company to develop an “India strategy” focused on the infrastructure sector, in particular on renewable energy, and it has joined with Japan Bank of International Cooperation (JBIC) to promote collaborative projects in decarbonization and digital transformation. PIF and Singapore’s SWF, the Government of Singapore Investment Corporation (GIC), have partnered to invest a combined $986 million in South Korea’s Kakao Entertainment Corp. QIA has parlayed its investment in Indian Edtech firm Byju to set up its wholly owned subsidiary in Doha to focus on students from across the Middle East.

Widening the geographic scope

Gulf SWFs are not just bankrolling ambitious projects at home to support diversification efforts but plowing billions of dollars into assets regionally and globally.

Bargain hunting in the West

North American and European assets have long been mainstays of Gulf SWF portfolios. Even during the 2008-09 financial crisis, Gulf investors held onto their major Western stakes, taking advantage of their long-term investment horizons to ride out the downturn and seek out undervalued assets.

In 2022, Gulf SWFs spent almost $89 billion on investments globally, double the previous year. According to Global SWF, an outsized $51.6 billion of that amount was deployed in Europe and North America. The same source also reported that, out of the 60 SWF investments announced in 2022 that were larger than $1 billion, of which 26 were made by Gulf funds, 17 were invested in North American or European assets. This includes ADIA’s joint ventures with Rockpoint and Landmark Properties in the United States as well as Greystar in the United Kingdom. Other examples include Mubadala’s investment in British broadband provider CityFibre and acquisition of a stake in Scandinavian-based communications company GlobalConnect along with the deal by PIF that made it the second-largest shareholder of the luxury carmaker Aston Martin.

Building bridges with neighbors

Although the West continues to be the preferred destination of petrodollars managed by Gulf SWFs, the region’s wealth funds have been moving to diversify their overseas exposure. The Gulf states have been building economic bridges with their poorer neighbors, some of which they once considered adversaries. Three key regional destinations are Egypt, Iraq, and Turkey.

Capitalizing on the withdrawal of foreign portfolio investments from Egypt, Saudi PIF last year launched the Saudi Egyptian Investment Company (SEIC) as its leading investment vehicle for acquiring stakes in local companies, with a focus on infrastructure, real-estate development, healthcare, financial services, food and agriculture, and pharmaceuticals. Soon after its establishment, SEIC purchased minority stakes for $1.3 billion in four Egyptian companies. Around the same time, Qatar’s QIA transferred $1 billion to the Central Bank of Egypt as part of a deal to buy stakes in local firms. QIA is reportedly negotiating with Egypt to conclude what could be a landmark investment deal to acquire stakes in seven historic hotels. The UAE’s ADQ, which established an office in Cairo in December 2021, has also taken steps to ramp up its investments in Egypt and support co-investment with The Sovereign Fund of Egypt (TSFE).

After a lengthy period of estrangement, a cautious rapprochement between the Gulf states and Iraq appears to be gaining momentum, with clear evidence that Gulf wealth funds are interested in investing there. For example, Qatar QIA has said it plans to invest $5 billion in various sectors in Iraq over the coming years. Additionally, Saudi PIF has created a new unit to target investments in a number of Iraqi industries. The newly formed Saudi-Iraqi Investment Company, with a capital of $3 billion and headquarters in the kingdom, reportedly will seek investment opportunities in infrastructure, mining, agriculture, real estate development, and financial services.

Gulf wealth funds, led by ADIA and ADQ, have also been scouting for investment targets in Turkey, amid signs of a political thaw in relations between Abu Dhabi and Ankara. And Turkish President Recep Tayyip Erdoğan is himself visiting the Gulf since July 17, partially in an effort to drum up investment in his country, having reportedly already secured a series of deals worth $50 billion with the UAE. The QIA last year bought a stake in the Eurasia Tunnel company in Istanbul and, more recently, partnered with Turkish firm Esas Private Equity to invest $105 million in Turkish artificial intelligence (AI)-powered marketing firm Insider.

Pivoting to Asia

Gulf SWFs are increasingly active in Asia, with China, India, and member states of the Association of Southeast Asian Nations (ASEAN) as the major beneficiaries. In addition to hiring specialist teams to study Asian markets, Gulf wealth funds have opened offices in the region — PIF has an office in Hong Kong, while Mubadala and QIA have set up shop in Singapore. The Private Equities Division (PED) of ADIA has deployed dedicated investment teams focused on “China and India-Southeast Asia.”

As illustrated in Table 2, Gulf SWF spending targets in Asia span a wide range of sectors, including gaming and e-sports, agribusiness, renewables, and consumer tech and data services.

Table 2: Sample of Gulf SWF Investments in Asia (2020-2023)









Tata Power

$525 million



data services

Princeton Digital Group

$350 million



digital services


$1.2 billion



electric vehicles


$1 billion



electric vehicles

Xpeng Motors

$100 million





$4.36 billion

PIF (Savvy)




$260 million

PIF (Savvy)




$265 million

PIF (Salic)



Olam Agri

$1.25 billion

Recent deals in Asia map onto their overall investment strategies in interesting and important ways. PIF’s acquisitions in gaming and e-sports in Asia are complemented by its more than $3 billion worth of stock purchases in U.S. video game developers. These and other, similar investments aim to accelerate the growth of mobile e-sports, with a particular focus on the kingdom itself — a thriving market of 23.5 million gamers — and serve the broader objective of making Saudi Arabia a global industry hub. The purchase of a minority stake in Olam Agri by the PIF’s Agricultural and Livestock Investment Company (SALIC) serves the latter’s aim of achieving food security for the kingdom and follows other recent deals struck in the food industry, namely in Canada, Brazil, and India. QIA’s new venture, Bodhi Tree, is part of its big push to scale investments in sectors with deep consumer engagement — including media, healthcare, and education — in India and Southeast Asia.

Gulf sovereign investors’ appetite for Chinese assets is strong. Yet it is also worth noting that Chinese venture capitalists and local officials are eager to access Gulf SWFs. Local officials from Shenzhen, Guangzhou, and Chengdu as well as the province of Sichuan are seeking to attract Gulf wealth funds to sectors prioritized by Beijing, including semiconductors, biotechnology, new energy, high-tech manufacturing, and infrastructure. These developments signify, in the case of Sino-Saudi ties and China-Gulf relations more broadly, a progression from a trade partnership to a “core investment relationship.”


Gulf SWFs have accumulated massive assets, developed seasoned teams, and crafted sophisticated investment allocation strategies. Although the region’s funds vary in the size, variety, and scope of their investments, all have become more active and expanded their international footprint in recent years.

Gulf SWFs nowadays are not just caretakers of national wealth. They have emerged as a crucial financial resource for present and future needs and are an increasingly important tool for exerting their countries’ political power, both at home and abroad. Gulf states are using the latest windfall to serve not one, but multiple purposes. These include investing in industries of the future, in some cases preparing for the global energy transition, as well as increasing visibility, strengthening cross-border partnerships, erecting local platforms in underdeveloped sectors, and building national champions.

The current phase of Gulf SWF dealmaking is marked not only by the funds’ expanding global footprint and growing influence, but by their mounting responsibilities. Most of the Gulf’s wealth funds today are asked to perform financially as well as create jobs, propel the domestic economy, contribute to decarbonization goals, and more. Aside from these responsibilities, Gulf SWFs have lately been exhibiting an increasing appetite for risk. The risks they face should not be minimized, and they include a track record marred by several big bets that underperformed, growing protectionism that threatens to curb inward investment, and the risk of getting caught in the escalating tensions over technology between the U.S. and China. Nevertheless, the ability of Gulf SWFs to surmount these challenges should not be underestimated. For despite being associated with their most eye-catching gambits in sport, Gulf sovereign funds have become sophisticated and flexible investors.


Dr. John Calabrese teaches U.S. foreign policy at American University in Washington, D.C. He is a senior fellow at MEI, the book review editor of The Middle East Journal, and previously served as the director of MEI's Middle East-Asia Project (MAP).

Photo by FAYEZ NURELDINE/AFP via Getty Images

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