War drags Middle East private capital as global capital rises elsewhere

Private capital investment in the Middle East fell 73% y-o-y to just USD 1.7 bn, the steepest drop and the smallest half-year total of any market the Global Private Capital Association (GPCA) tracks, according to the organization’s mid-year industry data seen by EnterpriseAM. It’s a sharp reversal for a region that held up reasonably well through the last few years: Middle East private investment value peaked at USD 24.1 bn in 2022 and hit USD 21.6 bn in 2025.

This was expected: A month into the war, Jeff Schlapinski, managing director of research at GPCA, previously told us that the regional conflict had brought “a pause or a slower pace in new investments” — even as some investors were still honoring their capital calls. The VC picture tells a related but distinct story. Startups raised USD 1.35 bn across 214 transactions in 1H 2026, dropping 22% y-o-y with dealcount off 41% to a multi-year low, according to Magnitt.

The good news came after the cutoff: Since 30 June, sovereign-scale capital has moved fast. Blackstone, Brookfield, and KKR agreed to a USD 16 bn lease-and-leaseback transaction for Kuwait Petroleum Corporation’s pipeline network, and Brookfield announced a USD 2 bn first close for its PIF-backed regional fund. These were both signals that large, government-anchored capital hasn’t lost its appetite for the region.

Beyond the Middle East: Private capital across Asia-Pacific, Latin America, Africa, and Central and Eastern Europe rose 23% y-o-y to USD 94.7 bn in 1H, defying the same geopolitical and energy-supply disruptions that hit the Gulf.

China stole the show: AI and robotics mega rounds pushed 1H investment above the full-year totals for 2023, 2024, and 2025. Digital infrastructure jumped alongside — a USD 4.5 bn investment in Singapore’s Day One data-center platform led the pack. In Africa, Liquid Intelligent Technologies raised USD 660 mn in debt financing.

Climate capital is also back on the menu: Fundraising for climate-focused strategies in 1H already topped the total raised in all of 2025, with Actis’ USD 2.5 bn first close for its sixth renewable-energy fund and BTG Pactual’s reforestation and timberland vehicles raising USD 1.6 bn combined. CEE investment nearly tripled y-o-y and Latin America almost doubled, with infrastructure at 39% of deployed capital.