Gulf sovereign funds expected to control $18 trillion by 2030

The Gulf states have become a dominant force in the world of sovereign wealth funds even if their assets fall shy of those in Norway and China.

Led by the UAE, Kuwait and Saudi Arabia, government-owned funds in the Gulf are expected to grow 50% by 2030 and control $18 trillion in assets, according to an analysis by Deloitte Middle East. The region is home to six of the world’s 10 largest funds and about 40% of total sovereign assets.

The Abu Dhabi Investment Authority leads the Gulf with $1.05 trillion, according to Deloitte, followed by the Kuwait Investment Authority at $1.02 trillion, the Saudi Public Investment Fund with $925 billion and the Qatar Investment Authority with $526 billion.

“The Gulf region continues to be the epicenter of sovereign wealth fund activity, with its major players driving innovation in investment strategies and operational excellence,” Julie Kassab, sovereign wealth fund leader at Deloitte Middle East.

Norway’s Government Pension Fund Global is the world’s largest sovereign wealth fund, with assets of more than $1.7 trillion. China Investment Corp. comes in second with $1.3 trillion.

Another phenomenon identified by Deloitte is the proliferation of Royal Private Offices, or RPOs, that now control approximately $500 billion in assets in the Gulf and have become one of the key drivers behind the creation of new sovereign wealth funds in the region.

Sovereign wealth fund tracker Global SWF has identified 35 RPOs in the Gulf, with the UAE home to a vast majority of the offices. The most significant of them is the Royal Group, a family enterprise headed by Sheikh Tahnoon bin Zayed, the UAE National Security Adviser and Deputy Ruler of Abu Dhabi.

Sheikh Tahnoon is also Chairman of sovereign funds ADIA and ADQ, in addition to leading some of the emirate’s largest firms, including International Holding Co., MGX and G42.