Middle East investors will invest more at home, BlackRock says

The Middle East wants to put more of its capital to work at home — but it’s still mostly investing abroad. The region’s investors completed around 360 private equity and venture capital transactions overseas in 2025 against about 170 at home, according to BlackRock Aladdin’s new Market Evolution: The Middle East report (pdf), which draws on Preqin data through June 2026. That gap has narrowed since 2021, but mainly because overseas transactions fell, not because domestic ones grew.

That’s the gap BlackRock expects to close: The report finds limited evidence of sustained growth in domestic private equity and venture capital transactions by Middle East-based investors since 2021, but BlackRock says the region is shifting from a source of capital for global managers to a destination. Its analysis suggests that, at the margin, the USD 50-100 bn of capital that might previously have left the region could stay home, Ben Powell, chief investment strategist for the Middle East and APAC at the BlackRock Investment Institute, told reporters at a Dubai roundtable. The GCC will remain a significant capital exporter, he said, but more of it is likely to stay in the region.

The war is accelerating that shift: BlackRock sees the GCC deploying USD 2.1 tn in capex through 2030, with a growing share staying home, as we noted earlier this month. More than 80% of that is headed to energy infrastructure, industry, digital assets, and social investment as Gulf states prioritize resilience after the war disrupted shipping routes from the Strait of Hormuz to the Red Sea.

PIF is leading the way: The Middle East’s share of Saudi sovereign wealth fund Public Investment Fund’s direct private equity transactions rose from around 25% in 2020 to just under 70% in 2025. It has also anchored regional vehicles, including Brookfield Middle East Partners, which reached a first close of approximately USD 2 bn in July and targets 50% of its investments in Saudi Arabia.

Saudi Arabia dominates fund formation: Of the 590 Middle East-based private capital funds closed since 2015, 359 (61%) were based in the Kingdom, against the UAE’s 143. Regional private equity funds have raised USD 4.5 bn so far this year, already above 2025’s USD 3.5 bn, while real estate fundraising collapsed from USD 4.2 bn in 2021 to USD 100 mn last year. Qatar, Kuwait, Bahrain, Oman, and the remaining markets accounted for a combined 88, according to Preqin. Total regional fundraising stood at USD 4.5 bn in 2025, below its USD 7.7 bn peak in 2021.

But deployment at home has slowed this year: Middle East private capital investment dropped 73% y-o-y to USD 1.7 bn in 1H 2026, its lowest half-year total on record, according to Global Private Capital Association data we covered earlier this month.

The UAE is also investing big at home and abroad: BlackRock’s Global Infrastructure Partners (GIP) and Singapore’s sovereign wealth fund Temasek Holdings partnered with the UAE’s L’imad Holding and Adnoc in May on a USD 30 bn fund targeting GCC and Central Asian infrastructure.

MARKETS THIS MORNING-

Asian markets were in the green earlier today, with Japan’s Nikkei up 1.7% and South Korea’s Kospi following at 0.9%. The gains followed losses across US equities, while benchmark ​10-year Treasury yields surged to their highest level since 2007.

THE CLOSING BELL-

The EGX30 fell 1.3% at yesterday’s close on turnover of EGP 9.1 bn (22.2% below the 90-day average). Local investors were the sole net buyers. The index is up 29.6% YTD.

In the green: E-finance (+1.5%), Raya Holding (+0.7%), and Alexandria Containers and Goods (+0.5%).

In the red: Heliopolis Housing (-3.7%), Orascom Development (-3.4%), and Rameda (-3.3%).