War or not, Gulf sovereign funds keep investing, but the strategy is starting to shift

Gulf sovereign wealth funds are still deploying capital at pace, even as active conflict marred nearly a third of 1Q 2026. Funds including Abu Dhabi sovereign wealth fund Mubadala, Saudi Arabia’s PIF, and the Qatar Investment Authority deployed almost USD 25 bn during the quarter, according to Global SWF data picked up by Semafor.

Deep pockets explain the paper trail: Gulf sovereign funds now control around USD 5 tn in assets — a figure expected to balloon to nearly USD 18 tn by 2050 — giving them the firepower to absorb shocks and keep capital flowing.

Gulf investors remain heavily tied to international markets, particularly the US, where depth in tech, infrastructure, and finance makes a rapid reallocation difficult. Recent agreements, including wagers on AI, media, and energy assets, suggest existing commitments are still being honored.

Case in point: Mubadala just last week closed its third Brazil fund, overshooting its initial target of USD 750 mn with USD 900 mn raised. It’s not just Mubadala — the Abu Dhabi Investment Authority has also kept active, ramping up exposure to private credit in Europe and Asia.

What if the war drags on?

Overseas deployment is likely to slow down, with capital redirected toward government support, domestic industries, or strategic sectors like aviation and defense, effectively crowding out some global investments, Global SWF’s Diego López said.

We knew this, to an extent: Global SWF said last month that Abu Dhabi’s sovereign funds could scale back overseas investments or redirect capital toward domestic “resilience” priorities if disruption to Hormuz persists. Adia would likely rebalance into liquid markets, while Mubadala and L’Imad could refocus on supply chains, infrastructure, and economic stability.

However, Mubadala could also be well positioned to hunt for bargains, deploying capital opportunistically into distressed assets, López said. The state-backed power house has recently reached AED 1.4 tn in AUM, as it upped deployment across AI, healthcare, financial services, and private credit.