Gulf states will reinforce investment strategies

Significance

US banking stress reinforces risks for Gulf Cooperation Council (GCC) sovereign wealth funds (SWFs), although they are not significantly exposed to global banks directly. GCC SWFs have increased domestic investment in recent years.

Impacts

• GCC funds may find opportunities for technology company investment as other players in the venture capital market remain cautious.
• Regional funds are unlikely to increase exposure to global banking assets given the risks to the sector and regulatory concerns.
• GCC SWFs will look for investment opportunities through joint investments in other emerging economies.
• GCC funds are likely to find gold attractive, as they look for more inflation and US dollar hedges.
• The PIF will remain one of the most active GCC funds in terms of new investments.