Abu Dhabi sovereign wealth funds could scale back investments or redirect them toward national priorities in case of a prolonged disruption to the Strait of Hormuz and a subsequent disruption in energy flows, Global SWF’s head of data and research Daniel Brett wrote in a note seen by EnterpriseAM.

Funds may be redirected toward "resilience investments" if energy and processing infrastructure continue to be targeted in an escalation scenario, Brett wrote. Each one would focus on its own mandate:

  • The Abu Dhabi Investment Authority (Adia) would redirect investments toward “resilience sectors” within Abu Dhabi’s sovereign system;
  • Mubadala will refocus its capital on sectors supporting economic resilience and strategic supply chains;
  • L’Imad Holding, whose mandate includes strategic sectors like infrastructure, real estate, and urban mobility — with both a domestic and global focus — could start focusing capital on logistics and security infrastructure.

This would be unusual — Economist Hamzeh Al Gaaod previously told us that Gulf SWFs don’t currently have a stabilization mandate, and historically, funds like the Abu Dhabi Investment Authority are designed to “withstand volatility rather than respond to it,” Brett writes, with very infrequent withdrawals meant to be repurposed for the government.

What Adia would normally do: Rather than fully liquidating its positions, it tends to rebalance into market dislocations, Brett explained.

Meanwhile, funds like Mubadala and L’Imad, which focus on economic diversification and strategic sectors, would potentially slow investments or make changes to partnership structures depending on national priorities. L’Imad — which now holds all of ADQ's assets — would refocus its efforts toward maintaining domestic economic stability and protecting strategic holdings.

How likely are they to shift their priorities? Global SWF sees only a 25% likelihood of a prolonged disruption, which would tighten liquidity and see SWFs enforce a degree of discipline, while a scenario where an escalation would prompt a repurposing of funds is only 15% likely.

The most likely scenario? There’s a 40% chance of a temporary disruption to Hormuz, followed by a reopening and an environment of inflated oil and gas prices, leading to potential windfalls for Gulf sovereign institutions. In this case, they would increase investments strategically.

Adia would look toward liquid public markets; Mubadala would continue to prioritize investments in tech, infrastructure, and the energy transition; and L’Imad would increase “incremental investments in logistics, food security, energy, and infrastructure.”

Elsewhere in the region

PIF swings with oil revenues: During a disruption, Saudi Arabia’s Public Investment Fund (PIF) would likely rephase domestic gigaprojects to enforce capital discipline. High oil prices and Aramco dividends, however, act as a turbo-charger, enabling the fund to selectively deploy capital into global tech and infrastructure.

In an escalation scenario, PIF would shift its focus toward national resilience, prioritizing defense industrialization and logistics to secure the Kingdom’s supply chains.

The fund is already eyeing new investors to fuel its gigaprojects, planning to cut its capital spending by 15%, AGBI reports, citing sources it says are familiar with the matter. The fund aims to refine its 2026-2030 investment strategy by concentrating capital on a tighter group of portfolio companies and scaling them into global champions across sectors such as manufacturing, AI, and aviation. It also plans to focus on infrastructure, hospitality, and entertainment projects tied to Riyadh’s Expo 2030 and the 2034 World Cup.

What to watch

Discussions around the strain on Gulf budgets and a potential scaling back of investments are already reportedly taking place. The FinancialTimes reports that three of the four big Gulf economies — Saudi Arabia, the UAE, Kuwait and Qatar — have jointly discussed the strain under which their budget and economies have been put due to the war, but sources declined to name which countries were having these discussions.

Discussions include reviewing overseas investments. The UAE over the past year committed bns of USD to countries including the US, Canada, South Korea, and Africa, and poured bns into major acquisitions and sporting events, very often through its sovereign wealth funds. The US alone was set to receive some USD 1.4 tn in investments from the UAE.

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