Private capital links between Asia and the Middle East
The Global Private Capital Association has released a fascinating report outlining how strategic technology transfers are reshaping the private investment landscape between the Middle East and Asia.
While flows of capital and knowledge are travelling in two directions, investors from the Middle East are eyeing Asian digital assets. Many sovereign wealth funds are making long-term bets to solidify their footprint in the region’s digital landscape. For investors in VC-backed companies in Southeast Asia, Middle Eastern investors also represent a well-needed exit avenue.
Key report takeaways (Full report: link)
China and India have eclipsed the United States and Europe as export markets for Middle East oil and gas, with Asia and the rest of the world outside of advanced economies now accounting for two-thirds of total trade with the Middle East.
Diplomatic agreements between the Middle East and Asia increasingly prioritise infrastructure and technology, fostering collaborative pathways to unlock cross-border synergies and mutual growth. Middle Eastern governments’ development plans, such as Saudi Arabia Vision 2030, “We the UAE 2031,” Oman Vision 2040, and Qatar National Vision 2030, have been making headway to diversify local economies and future-proof economic growth.
Cross-border investment activity between the Middle East and Asia has gained momentum, with the cumulative value of total cross-regional private capital deals reaching USD83b since 2020, compared to USD14b from 2016-2019.
India has accounted for 58% of Asia deal value with participation from Middle East investors and 51% of the number of Asia deals with Middle East investors since 2020.
Gulf SWFs are increasing direct dealmaking across Asia, seeking more control and diversified exposure while maintaining partnerships with select top-performing managers. Standalone LP direct deals have accounted for 39% of capital deployed in all Asia private capital deals, including a Middle East investor.
As Gulf governments seek to diversify their economies, SWFs are deploying billions into electric vehicle (EV) manufacturing, renewable energy projects and digital infrastructure in Asia.
Asian investors and portfolio companies are overwhelmingly targeting the Gulf as a source of funding, leading many to expand operations to the region. As the Middle East emerges as an economic hub, Asian companies are lured to its strategic location, cultural similarities and perceived access to investment sources.
Read more about the Indian exit environment here.
Disclosures
