GCC sovereign wealth funds (SWFs) are pivoting East as Asia’s growth story outpaces mature Western markets, Sovereign Wealth Fund Leader at Deloitte Middle East Julie Kassab told EnterpriseAM. As some of the world’s biggest spenders, Gulf funds are increasingly looking at Asian economies that offer a “compelling mix of higher growth potential, younger demographics, and expanding consumer markets,” she said.

Asia still accounts for a small portion of Gulf SWFs’ portfolios, but allocations are steadily growing. Abu Dhabi Investment Authority’s (Adia) portfolio in 2024 was predominantly allocated to North America at 40-60%, while emerging markets got 10-20% and developed Asia made up 5-10%. Meanwhile, The Public Investment Fund secured an exemption from India’s foreign ownership rules.

Despite domestic investments being important for most Gulf SWFs, Asia remains a priority, Kassab said, adding that Gulf SWFs will aim to “optimize their portfolios, balancing domestic priorities with strategic international investments.” The PIF is prioritizing Saudi projects, with around 80% of capital staying at home and the rest invested abroad to complement domestic development.

Approaches differ by fund: “Abu Dhabi Investment Authority is a pure financial investor without offices overseas, so they will always try and leverage partners on the ground,” Global SWF Founder and Managing Director Diego López said. “Mubadala is different, it has significant offices in both Moscow and Beijing and it seeks economic advancement of the UAE, besides financial returns. And PIF is just getting started in Asia, after getting a qualified foreign institutional investor (QFII) license only a few years ago, and just recently opening in Hong Kong and Beijing,” he added.

Asia’s priorities align well with the Gulf’s: Gulf funds are chasing Asia’s energy transition and digital push, as they continue to prioritize diversifying their economies and portfolios away from oil. Kassab pointed to the continent’s expansion in renewables, advanced manufacturing, and tech innovation, which create both attractive investment prospects and platforms for knowledge transfer. Rapid urbanization and infrastructure growth also fit neatly with SWFs’ long-term horizons.

Western markets, meanwhile, are losing some shine. North American assets “present high volatility and uncertainty,” while European assets “lack significant growth,” López told us. Kassab added that stronger government-to-government ties are also giving Gulf funds access to previously restricted sectors such as infrastructure.

Gulf SWFs are not pouring investments into a vacuum — they’re strategic in their choices. “Sovereign funds are helping create stronger business and trade links between the Middle East and Asia,” Lopez said. “The corridor Middle East-Asia is getting busier, and SWFs are playing an important role in making it happen,” he added. Investments are taking place alongside a major diplomatic push for closer ties with the region.

Who’s in the spotlight? India and China dominate the agenda. “Major Asian economies such as India and China remain central to Gulf SWF strategies due to their scale, innovation ecosystems, and robust consumer markets,” Kassab said. The top focus areas include renewables, technology, infrastructure, healthcare, and consumer goods, Kassab said. Advanced manufacturing and real estate are also gaining momentum, she added.

Each country offers prospects in key strategic sectors: Saudi funds are focusing on “strategic partnerships and co-investments, particularly in transformative sectors like renewables and technology”, Kassab told us. “In China, it may be more technology and innovation; in India it may be more renewables and toll roads; and in Indonesia it may be more healthcare and consumer,” López said.

The next frontier: Southeast Asia is becoming a bigger part of the mix. López noted that while China, India, and Indonesia have traditionally been the big three, “other smaller economies such as Vietnam or Malaysia present great [potential] too.”

Kassab also name-checked Vietnam, Malaysia, and Bangladesh as among the smaller nations in Asia that are gaining traction due to their resource strengths and growing middle-class populations, Kassab said. Vietnam and Bangladesh in particular show promise in renewables, logistics, and consumer technology, she added.

What’s still missing? Success requires “calibrated entry strategies,” Kassab said, suggesting that SWFs could strengthen their approach by “expanding regional partnerships, establishing local offices, and collaborating with development finance institutions.” She also flagged underexplored areas like healthcare infrastructure, agri-tech, edtech, and climate adaptation as promising frontiers for Gulf capital.

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