The Daily Circuit: Gulf sovereigns cast large shadow + Egypt’s EU haul

👋 Hello from the Middle East!

Today in The Daily Circuit, we’re looking at Egypt’s multibillion-dollar takeaway from its weekend summit with the EU, Dubai’s expansion of its international financial center,  Qatar’s $5.5 billion tourism project centered around a Disney-style fun park and the Paris runway debut of Riyadh Air’s crisp purple uniforms. But first, an industry report points to new frontiers for the Gulf’s state-owned investment funds.

Gulf sovereign wealth funds continue to cast a large shadow on the global investment landscape, more active than at any other time in the last 15 years. Saudi Arabia’s Public Investment Fund, the Abu Dhabi Investment Authority and the Qatar Investment Authority made up over half of the $96 billion from state-controlled deals in the first half of 2024, according to a new report from GlobalSWF.

The U.S. research firm’s first-half analysis of the year reinforces the role of the Gulf — home to over $4 trillion in assets — as a new center of gravity for those seeking large check sizes, attracting some of the biggest players in tech, private equity and banking. 

The salad days may continue as the latest breakeven prices forecast by the IMF show that Qatar, the UAE, Oman and Kuwait may enjoy fiscal windfalls this year. Global market uncertainty has meant the Gulf is one of the few places in the world enjoying a bumper year –with public equities reaching all-time highs and the price of still-all-important-oil hovering at a healthy $83 a barrel. 

“While the market uncertainty has invited global funds to be cautious, Gulf-based and particularly, Abu Dhabi-based funds, have received significant windfall from oil and are more active than ever,” the SWFGlobal report says. Saudi Arabia, with its massive outlays for domestic projects under Vision 2030, and Bahrain, a smaller petro-state, may bear significant deficits, according to the IMF. 

Assets under management are at historical highs once again, well beyond the 2021 year-end figures, SWFGlobal found. For the first time, total assets under management of sovereign wealth funds globally has passed $12 trillion. Still overall, the investment activity of the first half of 2024 signals caution. SWFs deployed $64.2 billion in 135 deals. “Investments are fewer, but larger on average, and the overall average size of [$410 million] per deal is the largest we have seen in many years,” SWFGlobal said.  

CAIRO DEALMAKING

Egypt emerged from its weekend huddle with the European Union holding signed agreements for billions of dollars in business deals ranging from construction projects to renewable energy. European Commission President Ursula von der Leyen told the Egypt-EU Investment Conference in Egypt’s New Administrative Capital outside Cairo on Saturday that deals potentially worth over 40 billion euros ($43 billion) were being negotiated with Egyptian partners. Among them were agreements on four green ammonia project including an $11 billion deal with Frankfurt-based DAI Infrastruktur. The Sovereign Fund of Egypt also signed a deal with BP, UAE’s Masdar, Egyptian infrastructure company Hassan Allam Utilities and Infinity Power to invest in a green ammonia plant in Ain Sukhna Port on the western coast of the Gulf of Suez. EU officials also said they would move ahead with plans to invest up to 1 billion euros  in the Egyptian economy, the first tranche of a 7.4 billion-euro European aid package agreed upon in March.  

ELBOW ROOM

The Dubai International Financial Center is stretching well beyond its original footprint. One of the Middle East’s biggest money hubs broke ground this week on a $1 billion mixed-use development project known as DIFC Square. The finished product – set to handover in the first quarter of 2026 – will span 1 million square feet of built-up space and comprise three connected buildings providing 600,000 square feet of offices and 17,200 square feet of retail area, including a smorgasbord of shops and restaurants. The move for more elbow room comes as Riyadh and Abu Dhabi continue ongoing competitive campaigns to attract international financiers to their financial districts. DIFC is one of the region’s original international financial centers, established in 2004 and regulated by the Dubai Financial Services Authority, an independent regulator exclusive to the zone, and by its own court system, DIFC Courts, separate from Dubai’s legal system and that of the federal government of the UAE. Today it is home to more than 5,500 active companies, up 26% compared to 2023, and employs more than 41,500 people. 

Abu Dhabi Investment Authority: First Lady Liza Marcos of the Philippines said she had “insightful discussions” in Abu Dhabi last week with ADIA officials, when she was accompanied by Rafael Consing Jr., president of the Maharlika Investment Corp., which manages the Philippines’ Maharlika sovereign wealth fund. She said her husband, President Ferdinand R. Marcos Jr., will visit the UAE in November.

Public Investment Fund: Saudi Aramco, in which the PIF owns a 16% stake, has awarded construction contracts worth $25 billion for the development of its Jafurah gas project, as it looks to diversify its fuel production beyond oil. The kingdom has some of the biggest gas reserves in the world. Development of the Jafurah field, estimated to hold 200 trillion cubic feet of gas, is expected to cost $100 billion and boost the firm’s gas production more than 60% by 2030, Bloomberg reported.

🎢 Fun Park: Qatar is starting work on a $5.5 billion tourism development that will be centered around an amusement park bigger than Walt Disney Co.’s Magic Kingdom, Bloomberg reports.

🚙 Car Engines: Saudi Aramco signed a set of agreements on Saturday to acquire a 10% equity interest in Horse Powertrain Ltd., an automobile engine company formed by France’s Renault Group and China’s Geely Automobile Holdings, for about $795 million.

💰 Tech Rebound: Israeli tech startups raised $2.9 billion in the second quarter of 2024, the highest level in two years, IVC Data & Insights and LeumiTech said on Sunday.

🛩️ Flying Private: Gama Aviation, a U.K.-based business aviation services company, is investing $100 million in a new facility at Sharjah International Airport as the region experiences a surge in private jet travel, Arabian Business reports.

🏦 Bustling Banks: Gulf lenders, including Abu Dhabi Commercial Bank and Dubai Islamic Bank, are handling ever-bigger deals, offering terms that the likes of Citigroup and JPMorgan Chase can’t compete with, Bloomberg reports.

☀️ Solar Bids: Oman’s Nama Power and Water Procurement Co. announced that France’s Engie, Japan’s Sumitomo, the UAE’s Masdar and Saudi Arabia’s Acwa are among the 12 companies bidding to develop its $400 million Ibri III solar energy plant.

🌀 Renewable Target: Egypt may raise its target for renewables to account for 58% of total energy generation by 2040, Electricity Minister Mohamed Shaker said at the Egypt-EU Investment Summit in Cairo on Saturday.

🇸🇬 Singapore Slinging: Singapore-owned investment company Temasek has been part of a flurry of international dealmaking by some of its biggest companies as it faces pressure to boost returns from its$282 billion portfolio, the Financial Times reports.

Sheikh Maktoum bin Mohammed, Deputy Prime Minister and Minister of Finance of the UAE and First Deputy Ruler of Dubai, chaired a meeting of the Dubai Executive Council in which the governing body approved a plan that seeks to attract $177 billion of direct foreign investments to the Dubai by 2033, which would make it one of the world’s top three city economies.

GCC Secretary General Jasem Mohamed Albudaiwi said the Gulf states are taking steps to strengthen trade and investment with American companies, speaking at a roundtable meeting in Washington D.C. last week organized by the U.S. Chamber of Commerce.

Saudi Minister of Economy and Planning Faisal F. Alibrahim will chair a new Board of Directors for the National Infrastructure Fund, known as Infra, that will include Olayan Financing CEO Nabeel Alamudi, National Development Fund Governor Paul Groff, Infra CEO Esmail Alsallom, Citigroup Managing Director of Banking and Capital Markets Advisory Stephanie von Friedeburg  and and Meridiam SAS Chief Strategy Officer Marie Lam-Frendo.

Yadin Antebi was named the new CEO of Bank Hapoalim, Israel’s biggest lender, succeeding Dov Kotler. Antebi, who has worked at the bank for a decade, was previously Israel’s Commissioner of Capital Markets, Insurance and Savings.

Bill Gates discusses the $2.2 billion he’s invested in some 160 climate change startups and initiatives, talking to the Wall Street Journal about his Breakthrough Energy fund and its investments in companies including TS Conductor and Aeroseal.

🥋 Martial Artists: Kids, teens and grown-ups will be donning gis in Abu Dhabi this weekend to kick off the UAE’s six-month long Khaled bin Mohamed bin Zayed Jiu-Jitsu Championship. Starting today at the Mubadala Arena and continuing through December, the competition will eventually crown champs from categories for 4-year-olds and up with medals and cash prizes worth AED 1.5 million ($408,000). Mohamed Al Dhaheri, Vice Chairman of the UAE Jiu-Jitsu Federation, said in a statement that the competition “reflects the UAE leadership’s limitless support” for the sport.

Riyadh Air unveiled the Sixties-inspired uniforms that cabin crew will wear when the new Saudi carrier starts flying next year, introducing the chic purple suits by Saudi designer Ashi during Haute Couture Week in Paris. (Riyadh Air)

July 1-3, Milan Italy: The Global Energy Transition Congress & Exhibition. An event bringing together thought leaders, innovators, and industry experts to address the challenges of accelerating the global energy transition. Milano Convention Centre.

July 10-11, Riyadh, Saudi Arabia: Global EV and Technology Forum. The inaugural summit in Saudi Arabia bringing together policymakers, companies and investors focused on sustainable urban mobility solutions. Riyadh International Convention & Exhibition Center.

July 15-26, Granada, Spain: ADIA Lab International Summer School. A course of lectures and case studies to explore the critical role of trust and safety in AI, examining the ethical, technical and societal implications of AI applications. University of Granada. 

Aug. 12-15, Riyadh, Saudi Arabia: Saudi Food Expo. One of the kingdom’s largest trade shows for the food & beverage industry. Riyadh Front Exhibitions. 

Sep. 30-Oct. 2, Dubai, UAE: Future Hospitality Summit. The global conference for leaders in the hospitaly industry expands this year at a new location with dedicated space for ESG planning, country pavilions and a larger exhibition area. Madinat Jumeirah.