As seen in the aftermath of the 2008 financial crisis, the Gulf Cooperation Council’s (GCC) Sovereign Wealth Funds (SWFs) became more confident investors in times of financial and economic troubles. Their role in stabilizing the international financial system has become more important during and after the recent financial crisis. Gulf-SWF invested over $50 billion in 2008 to support banks and financial institutions to mitigate the effects of the crisis while supporting the US dollar’s value. Some of the companies in which the Gulf countries invested during the crisis were global lenders Citigroup, Barclay and sports facilities such as the Manchester City football team and renowned shopping empire Harrods.

These SWFs were able to make such investments because of the excess liquidity they had accumulated from oil and natural gas exports. The GCC accounts for nearly 40 percent of global oil reserves and 24 percent of natural gas reserves. More specifically, the “Magnificent Seven” have a combined net worth of $3.2 trillion, which is roughly 40% of SWF’s global wealth. These seven sovereign wealth funds are Abu Dhabi Investment Authority ($829 billion), Kuwait Investment Authority ($769 billion), Saudi Public Investment Fund ($620 billion), Qatar Investment Authority ($445 billion), Investment Corporation of Dubai ($300 billion). ) and Abu Dhabi’s Mubadala ($284 billion) and Abu Dhabi ADQ ($108 billion).

While these SWFs were a more traditional type of investor twenty years ago, favoring equities and fixed income instruments, they have recently become more aggressive investors, taking large equity positions in international companies across a variety of sectors. This change of strategy is also due to their increased willingness to invest, the strength of the local teams and the increased political weight.

What are sovereign wealth funds?

A sovereign wealth fund is a government investment fund that invests government-generated money, often from a…