Despite the Iran war-driven volatility that soured investment climate globally, dealmaking by sovereign wealth funds from the Gulf region hit a record in the first six months of this year.
State-owned investment funds in the six-country Gulf Co-operation Council committed a historic high of $53.9 billion in investments through 108 deals in the six months to the end of June, industry specialist Global SWF said in its first-half report on Wednesday.
The state-controlled funds in the region that manage an estimated $5.7 trillion in aggregate assets showed no signs of slowing down, despite the Iran war that stoked uncertainty across asset classes for the better part of the first half of 2026, the report said.
The ranking of the most active funds was topped once again by Abu Dhabi-based Mubadala Investment Company, which invested $15.2 billion at group level. The rest of the Gulf region’s seven major sovereign funds also maintained a healthy investment appetite.
Deal making by state-owned investors was at a “historical maximum in terms of value, and the fourth-ever most active semester in terms of volume,” Global SWF said in the report.
“Of the 42 global mega-deals ($1+ billion in value), 21 of them involved Gulf SWFs, which have become frequent co-investors with other leading asset owners.”
Almost half of the capital deployed by the regional sovereign funds went to US deals, followed by China, the world’s second largest economy. The UK was the third-most popular destination for Gulf investment during the first half. The technology sector topped deal activity as the AI frenzy drove investments, according to Global SWF data.
Continued deal flow
The continued deal flow during the first six months of this year has upended the broader market's and analysts' expectations of a tightening in sovereign capital spending due to war-driven economic uncertainty.
Cross-border deal-making, investment flows in and out of the region, and long-term capital commitments, however, remain uninterrupted despite the conflict that sent shock waves through oil-import-dependent economies and rocked the global energy and financial markets.
Some of the world’s biggest sovereign wealth funds that invest on behalf of governments to generate long-term returns are based in the hydrocarbon-rich Gulf region.
The UAE, the Arab world’s second-largest economy, is home to state-owned investors including Abu Dhabi Investment Authority, Mubadala, newly created holding platform L’imad, and the Investment Corporation of Dubai.
The Emirates is the largest sovereign investor in the Middle East and is ranked fourth globally by Global SWF in terms of total sovereign assets that hit $3.08 trillion in March.
Adia, which does not disclose its assets, is one of the primary investment institutions that invest on behalf of the Abu Dhabi government. It is the largest sovereign wealth fund in the Gulf, with assets of about $1.1 trillion, according to Global SWF.
Global deal making
Globally, the deal making momentum also remained robust. Sovereign funds deployed $83.3 billion through 188 deals, while public pension funds invested $60.3 billion through 178 deals.
“If this pace continues, we may be in for the most prolific year yet, in terms of fresh capital invested by sovereign and pension funds,” Global SWF said.
The relative weight of Middle Eastern SWFs in the global numbers decreased from 48 per cent in the second half of 2025 to 38 per cent in the first half of 2026 “due to the strong activity of other investors”, including Canada’s Maple 8 institutions and Singaporean funds GIC and Temasek.
The deal making, however, was not smooth throughout the first half, Global SWF said.
“The War in Iran and the subsequent rise in oil prices and market volatility affected the industry dearly during the past six months,” it said.
However, the rapid recovery in global stocks and bonds has supported the growth of assets under management by global sovereign wealth funds to historical levels.
The Global SWF estimated that state-owned investors now manage $62.5 trillion, including $16 trillion by sovereign funds, $28 trillion by pension funds, $17.6 trillion by central banks, and $0.9 trillion by royal family offices.
“In terms of investment activity [globally], the first half of 2026 saw a sustained, if not higher, deal making by most SOIs [state-owned investors],” it said.
