(Bloomberg) -- The Persian Gulf’s sovereign wealth funds that manage $4.9 trillion are finding it easier to attract and retain personnel as they solidify their position as influential dealmakers.
Wealth funds and other sovereign entities from the oil-rich region invested $55 billion across 126 transactions in the first nine months of this year, according to data provider and consultancy Global SWF. That represents around 40% of all deals done globally by state-backed investors.
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A large chunk of those investments were in traditional destinations like the US and the UK, though China has emerged as a favored market with $9.5 billion deployed in the last 12 months, the report said.
Historically, Gulf-based institutions have faced difficulties in bringing over and keeping staff from abroad due to factors including the harsh climate and tax considerations for US citizens, according to Global SWF.
That’s changing now. The “chances are that international hires would get to be involved in some exciting and large deals they may not necessarily see back home,” the report said.
Global SWF estimates that regional sovereign funds employ almost 9,000, which means each individual manages on average $550 million. Private offices linked to royal family members, which manage around $500 billion in capital, have over 1,000 professionals on their payroll. Including other sovereign entities such as central banks and pension funds, the number of employees active in the sector rises to 20,000.
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$7.3 Trillion
The influence wielded by Gulf sovereign wealth funds is set to grow as combined assets expand to $7.3 trillion by 2030. While that’s a shade lower than the $7.6 trillion the consultancy forecast in its December report, it still represents a 49% increase from 2024.
Already, these entities hold greater bargaining power and are able to dictate terms on deals involving foreign entities.
“These powerhouses are forcing managers, bankers and consultants that serve them to establish regional offices, which are normally staffed with international professionals – who may, in turn, end up being recruited by the SWFs themselves,” the report added.
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Case in point is the Public Investment Fund, Saudi Arabia’s principal vehicle to spearhead the ambitious economic reforms introduced by the kingdom’s crown prince. The fund quickly grew into an investment heavyweight, now employing close to 2,000 people in Riyadh but with plans to grow in the US, London and Asia.
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In the United Arab Emirates, the nearly $1 trillion Abu Dhabi Investment Authority has also expanded in the past decade and a half as it handled more investments in-house instead of entrusting them to external fund managers. Despite a reduction in headcount recently - mostly back—office staff - the fund has been on a hiring spree, targeting quants and computer experts to set up an in-house “science lab.”
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