Middle East sovereign wealth funds will remain focused on emerging markets as they seek long term growth from India, Africa and Latin America, a new study has found.
Alternative investments, including property and private equity will also figure largely, according to the Invesco Global Sovereign Asset Management Study from the US-based investment management company.
About 54 per cent of Middle East sovereign investors, which includes sovereign wealth funds (SWFs), state pension funds, central banks and government ministries, will increase their funding levels this year, driven by strong country surpluses and government support.
About half of them increased their property allocations last year, and 29 per cent increased private equity holdings. This year, the survey found that founds were bullish on all major alternative asset classes – property, private equity, infrastructure, hedge funds and commodities.
The Middle East sovereign investors are expected to increase their allocations in global private equity by 83 per cent this year from 60 per cent last year, and global property by 100 per cent from 67 per cent.
The study is based on the responses of 52 sovereign investors across the globe, controlling US$5.7 trillion in assets. Overall, SWFs are estimated to hold $30tn in assets.
“Given alternatives underperformed during the period in which their allocations increased, it is clear that a strategic asset allocation strategy is driving sovereign investors to alternatives, rather than tactical allocation,” said Nick Tolchard, the head of Invesco Middle East and the co-chair of Invesco’s Global Sovereign Group.
“The main reason is that many sovereign investors, especially those with assets in excess of $50 billion, are seeing it take time to deploy assets in alternatives and emerging markets, and are yet to reach the asset allocation targets set five years ago.”
Globally the top SWFs include Norway’s government pension fund, Abu Dhabi Investment Authority (Adia), Saudi Arabia’s Sama Foreign Holdings, China Investment Corporation and Kuwait Investment Authority.
“Middle East sovereigns are decreasing their home-market bias, along with others, as there is more confidence in global markets, and their funding levels overall increase,” Mr Tolchard said.
About one third of western sovereign investors are expected to decrease allocations to the Middle East this year.
“There is no one reason for the decrease from Western funds, but as markets in the region broaden with more specific investment opportunities available, coupled with increased transparency, then the Middle East will increase in accessibility,” said Mr Tolchard.
Of the Middle East sovereign investors about two thirds are expected to increase allocations to Latin America this year, up from 40 per cent in the last year.
Half of them will increase funds in Africa, up from 40 per cent, and 60 per cent to India, up from 43 per cent last year.
Allocations to Eastern Europe are expected to remain flat, after declining last year.
On Friday, Adia pared its stake in the Chicago-based property investment trust General Group Properties – shedding shares worth $7.1 million. Adia is the world’s second largest SWF controlling, $773bn in assets, according to the US-based Sovereign Wealth Fund Institute.
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David Haye record
Total fights: 32
Wins: 28
Wins by KO: 26
Losses: 4
In numbers: China in Dubai
The number of Chinese people living in Dubai: An estimated 200,000
Number of Chinese people in International City: Almost 50,000
Daily visitors to Dragon Mart in 2018/19: 120,000
Daily visitors to Dragon Mart in 2010: 20,000
Percentage increase in visitors in eight years: 500 per cent
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LIVING IN...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Conflict, drought, famine
Estimates of the number of deaths caused by the famine range from 400,000 to 1 million, according to a document prepared for the UK House of Lords in 2024.
It has been claimed that the policies of the Ethiopian government, which took control after deposing Emperor Haile Selassie in a military-led revolution in 1974, contributed to the scale of the famine.
Dr Miriam Bradley, senior lecturer in humanitarian studies at the University of Manchester, has argued that, by the early 1980s, “several government policies combined to cause, rather than prevent, a famine which lasted from 1983 to 1985. Mengistu’s government imposed Stalinist-model agricultural policies involving forced collectivisation and villagisation [relocation of communities into planned villages].
The West became aware of the catastrophe through a series of BBC News reports by journalist Michael Buerk in October 1984 describing a “biblical famine” and containing graphic images of thousands of people, including children, facing starvation.
Band Aid
Bob Geldof, singer with the Irish rock group The Boomtown Rats, formed Band Aid in response to the horrific images shown in the news broadcasts.
With Midge Ure of the band Ultravox, he wrote the hit charity single Do They Know it’s Christmas in December 1984, featuring a string of high-profile musicians.
Following the single’s success, the idea to stage a rock concert evolved.
Live Aid was a series of simultaneous concerts that took place at Wembley Stadium in London, John F Kennedy Stadium in Philadelphia, the US, and at various other venues across the world.
The combined event was broadcast to an estimated worldwide audience of 1.5 billion.
UAE currency: the story behind the money in your pockets
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
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The biog
Simon Nadim has completed 7,000 dives.
The hardest dive in the UAE is the German U-boat 110m down off the Fujairah coast.
As a child, he loved the documentaries of Jacques Cousteau
He also led a team that discovered the long-lost portion of the Ines oil tanker.
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Starring: Brad Pitt, Damson Idris, Kerry Condon, Javier Bardem
Director: Joseph Kosinski
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Tips to stay safe during hot weather
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THE CLOWN OF GAZA
Director: Abdulrahman Sabbah
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The biog:
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