Private capital in the Middle East falls to its lowest half-year total on record in 1H 2026

Private capital investment in the Middle East fell sharply in 1H 2026, down 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-specific picture — though covering a broader MENA footprint than GPCA’s Middle East figures — tells a related but distinct story. Startups across the region raised USD 1.35 bn across 214 transactions in 1H 2026, according to Magnitt — down 22% y-o-y, with dealcount off 41% to its lowest half-year total since at least 2022 as foreign investors pulled back sharply.

Fintech still dominated what investments did close, capturing 47% of the region’s VC capital and 42% of VC-backed transactions in 1H, but overall momentum slowed as the conflict weighed on sentiment, per GPCA.

The good news: Since the 30 June cutoff, sovereign-scale capital has shown up in a hurry. In July alone, 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. Neither transaction counts toward the 1H numbers — but together they signal that large, government-anchored capital hasn’t lost its appetite for the region.

Beyond the Middle East, the picture looked very different. 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: Mega rounds for AI and robotics startups pushed 1H investment above the full-year totals for 2023, 2024, and 2025. Pure-play AI funding clustered overwhelmingly in China and, to a lesser extent, India, with DeepSeek, Moonshot AI, and Neysa helping push AI investment across GPCA markets to a record.

The picks-and-shovels trade followed close behind: Digital infrastructure investment jumped alongside AI, led by a USD 4.5 bn investment in Singapore’s Day One data-center platform. In Africa, Liquid Intelligent Technologies raised USD 660 mn in debt financing, including a USD 150 mn loan anchored by Ninety One-managed private credit funds.

Climate capital is also back on the menu: Fundraising for climate-focused strategies in 1H already topped the total raised in all of 2025 as energy disruptions revived interest in fast-to-deploy renewables. Actis held a USD 2.5 bn first close for its sixth renewable-energy fund, while BTG Pactual’s reforestation and timberland vehicles raised USD 1.6 bn combined.

Elsewhere, CEE investment value nearly tripled y-o-y, and Latin America almost doubled, with infrastructure accounting for 39% of capital deployed there. Pan-Asia funds raised USD 15.9 bn in 1H, including EQT’s record USD 15.6 bn Asia fund close.

MARKETS THIS MORNING-

Asian markets are mixed this morning, with South Korea’s Kospi trading at a 1.2% gain, while Japan’s Nikkei was flat. Meanwhile, Wall Street equities were either flat or notching minor gains — US futures were flat across the board.

THE CLOSING BELL-

The DFM fell 0.3% yesterday on turnover of AED 763.5 mn. The index is down 3.8% YTD.

In the green: Agility The Public Warehousing Company (+5.8%), Emirates REIT (CEIC) (+3.8%), Shuaa Capital (+3.8%).

In the red: BHM Capital Financial Services (-3.5%), Lunate S&P UAE UCITS ETF - Share A - ACCUMLATING (-3.4%), and Union Properties (-3.0%).

Over on the ADX, the index fell 0.7% on turnover of AED 1.1 bn. Meanwhile, Nasdaq Dubai was down 1.0%.

Etihad Energy activates 5.66% capital increase

Etihad Energy Holding is raising its capital by 5.66% to AED 3.37 bn by converting part of the mandatory convertible bonds issued to Brooge Energy into shares, according to a DFM disclosure (pdf). The company will convert AED 225.5 mn of bonds into 180.4 mn shares, with the increase taking effect after trading on 4 September. The shares issued in this conversion — and any from future conversions — will be subject to a 12-month lock-up.

IN CONTEXT- The conversion stems from Etihad Energy’s Brooge acquisition, which has already reshaped the business. The added storage assets helped lift 1H net income 277% y-o-y to AED 30.7 mn, while the company is now pushing further downstream with a planned USD 300-350 mn, 15k bbl / d refinery in Fujairah.