Saudi Arabia holds lion’s share of alternative AUM in the GCC at $10.0bn

LONDON, Nov. 06, 2023 (GLOBE NEWSWIRE) — Preqin, the global leader in alternative assets data, tools, and insights, published its Private Capital in the Gulf Cooperation Council 2023: Preqin Territory Guide report. The report explores how the alternatives market in the Gulf Cooperation Council (GCC)* is increasingly looking to domestic investment opportunities, beyond oil.

Years of growth paint a picture of optimism

The GCC’s assets under management (AUM) in private capital hit $1bn in December 2008, reaching $5.8bn as of December 2021, before more than doubling to $12.3bn in 2022, according to Preqin data. Saudi Arabia holds the lion’s share of this AUM in Dec 2022 at $10.0bn, followed by the United Arab Emirates (UAE) AUM with $2.1bn.

Preqin data and insights in the report point to how the GCC is emerging as a potential destination for capital deployment. This trend is demonstrated by the growing number of active fund managers and headline deals being completed by investors such as Blackstone, CVC Capital Partners, Silver Lake, and Apollo. Furthermore, the 529 active GPs in GCC member countries as of 2023 has nearly doubled from 268 in 2018.

An important factor driving change across alternative assets in the GCC is the role of the countries’ sovereign wealth funds (SWFs). Middle East-based SWFs, with combined AUM of more than $3.7tn as of March 2023, are among the biggest investors in alternative assets. Average allocations in 2022 surged to an unprecedented 44% of AUM in December 2022, representing an increase from 22% from December 2021.

David Dawkins, report author, at Preqin says, “As GCC leaders focus on domestic employment opportunities for their young population, the region’s SWFs are becoming more focused on domestic investments. Even a small uptick of the domestic fund alternatives allocations would have a transformative impact on the GCC’s private capital GPs.”

Key findings from the Private Capital in the Gulf Cooperation Council 2023 report include: 

• Venture capital: AUM for venture capital in the GCC reached $2.9bn as of December 2022, up from $1.5bn in December 2021. A change in investor sentiment towards the region has attracted capital into venture capital funds, with dry powder quadrupling from $400mn in December 2021 to $1.63bn at the end of 2022.
• Fundraising: In 2022, 23 venture capital funds closed with aggregate capital raised of around $2.5bn. In real estate, between September 2021 and September 2023 year-to-date (YTD), 81 funds have closed with an aggregate capital raised of $2.3bn. And in private equity, between 2018 and 2020, 38 funds closed at an aggregate raise of $1.7bn. In other words, 142 funds in the GCC, between 2018 and 2023, raised a total $6.5bn.
• Private equity: AUM for private equity in the GCC reached $2.2bn in December 2022, up from $1.25bn in December 2021.
• Private debt: Half of the GCC’s LPs (50%) surveyed by Preqin earlier this year stated they plan to increase allocations to private debt, compared with just 25% looking to decrease. Not only is this more than any other alternative asset class, it is a full six percentage points higher than our poll of investors globally.

For more information, and to receive a full copy of the report contact, Mimi Celeste Taylor at mimiceleste.taylor@preqin.com  

Notes to the editors

* The Gulf Cooperation Counci (GCC) consists of the intergovernmental, political, and economic union of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.

About Preqin

Preqin, the Home of Alternatives, empowers financial professionals who invest in or allocate to alternatives with essential data and insight to make confident decisions. It supports them throughout the entire investment lifecycle with critical information and leading analytics solutions. The company has pioneered rigorous methods of collecting private data for over 20 years, enabling more than 200,000 professionals globally to streamline how they raise capital, source deals and investments, understand performance, and stay informed. For more information visit www.preqin.com.

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