Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
Driving commercial and political engagement between Asia, the Middle East and Europe
Gulf sovereign wealth funds are looking East
Gulf sovereign wealth funds (SWFs) are increasingly investing in Asia’s markets. As of July 2022, they were involved in US$28.6bn-worth of acquisitions outside the Middle East and Africa, 45 per cent more than in 2021, with investments heading towards China, India, and Singapore.
Asia House’s new research report, The Middle East Pivot to Asia 2022, explores this trend in detail, outlining key deals in 2022 and assessing the future of SWF activity in Asia.
Key geographies
India has proven a particular focal point of Gulf SWF investment in Asia over the last year. Gulf SWFs are in particular attracted to India’s large population which is growing more affluent and increasingly demanding access to digital services and other technologies. In particular, India offers start-ups an excellent environment in which to scale up and deliver a high return on investment.
We have also seen Gulf nations commit to contributing funds in ASEAN in 2022, with the UAE, for example, pledging US$10bn to the Indonesia Investment Authority in July.
Private equity firms
We are also seeing increased interest by Gulf-based private equity firms in Asia. Gulf Capital, for example, is increasing its focus on emerging Asian economies as a growth market (Gulf Capital, 2021). Over the last fifteen years it has acquired 14 companies across Asia and has recently established an office in Singapore (Zawya, 2022).
“I see evidence of increased interest from Middle Eastern SWFs in Asia, be it in the form of opening new offices, exploring investment opportunities, or even just growing awareness of the region’s economies.”
Stephen Moss, Regional Chief Executive Officer, Middle East, North Africa and Turkey, HSBC. Read the interview.
Notable Gulf SWF activity in Asia
In February 2022, PIF and Japan Bank on International Cooperation signed an MoU to promote PIF and Japanese companies’ collaborative projects in a variety of sectors such as decarbonisation, digital transformation and smart city development (Japan Bank for International Cooperation, 2022).
In February 2022, Mubadala invested US$350mn in Singapore-based Princeton Digital Group (PDG). The investment will help PDG consolidate its position as a leading data centre operator in Asia (Mubadala, 2022b).
In March 2022, Saudi PIF-owned Saudi Agricultural and Livestock Investment Co. (SALIC) purchased a 35.4 per cent stake in Singapore’s Olam Group operating unit, Olam Agri (Cheok and Cang, 2022).
In April 2022, PIF tasked Bain and Company to develop an India strategy to identify investment opportunities in infrastructure and the renewable energy sector (Global SWF, 2022).
In May 2022, PIF bought a 5.01 per cent stake in Japan’s Nintendo. This follows PIF’s recent disclosure of stakes in two other Japanese gaming companies, Nexon and Capcom. It could pave the way for localised content to be created for the Saudi market. The weaker yen likely made these investments more affordable (Rahal, 2022b).
In June 2022, ADIA purchased a 20 per cent stake, worth roughly US$28mn in IIFL Home Finance, – a subsidiary of IIFL, one of India’s top financial service providers (The Economic Times, 2022).
Between 2021 and 2022, ADIA acted as an anchor investment in Indian firms Paytm and Life Insurance Corporation of India (LIC). LIC raised US$2.7bn in May 2022, in India’s biggest ever IPO (Tripathy and Joshi, 2022).
For more information about Asia House’s Middle East expertise and research services, and to enquire about bespoke presentations on the issues covered in the report, please contact Jonathan Smith, Corporate Affairs Manager: jonathan.smith@asiahouse.co.uk
