Middle East’s 8 Largest Sovereign Wealth Funds Exceed $3 Billion in Combined Total Assets: Preqin – News

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High oil prices provide fresh capital to increase allocations to alternatives



The Abu Dhabi Investment Authority (Adia) recently increased its target allocation ranges for private equity from 2-8% to 5-10%, and for infrastructure from 1-5% to 2- 7%. — File photo

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Published: Sun 7 August 2022, 15:38

The Middle East’s eight largest sovereign wealth funds (SWFs) have more than $3 trillion in combined total assets as high oil prices provide funds with new capital to increase their allocations to alternative investments, a report says .

Preqin, the global leader in alternative asset data, tools and insights, has released a new report, “Fundraising from the Middle East: A guide to raising capital” to help international managers find new capital from investors. investors in a specific region.

The report finds that the current high oil prices are providing new capital for the funds to increase their allocations to alternatives, as most of their funding relies on revenues from the state-owned oil and gas industry. This in turn creates new opportunities for managers to help SWFs diversify away from commodity dependence.

The Abu Dhabi Investment Authority (Adia) recently increased its target allocation ranges for private equity from 2-8% to 5-10%, and for infrastructure from 1-5% to 2- 7%.

“While these bands are wide, the direction of Adia’s movement is a good signal as to the broader ambitions of its portfolio. Understanding its current exposure to these asset classes can also help shape proposals to attract potential commitments. For example, until 2012 Adia’s deal exposure was primarily towards buyout, while 2013 saw its focus shift more towards venture capital,” according to the report.

Alex Murray, vice president of Research Insights at Preqin, said the Middle East offers international managers a promising opportunity to find new sources of capital.

“The investor base is diverse and deep, so intelligence on the potential market is crucial to focusing fundraising efforts to ensure success. The region’s economies are improving, but the desire to move away from dependence on oil revenues offers opportunities for private capital models to see capital invested outside the region,” he said. declared.

Family offices focus on China

When it comes to which emerging markets will present the best opportunities over the next 12 months, family offices in the Middle East show much stronger confidence in China, with 63% citing this market as presenting one of the better opportunities, compared to only 30% of the wider investor base in the region.

“Family offices also had a lower preference for the Middle East as a deployment market, which may signal a stronger desire to see capital invested outside the region,” the report said.

Key facts about fundraising in the Middle East 2022:

• Private equity allocations increased from 2-8% to 5-10% by Adia

• High oil prices provide fresh capital to increase allocations to alternatives

• 63% of family offices in the Middle East cite China as the market presenting some of the best opportunities over the next 12 months

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