How is capital being reprioritized across Gulf sectors in the wake of recent geopolitical events?
Recent geopolitical events have brought sectors like defense, food security, supply chain, and logistics firmly to the top of capital allocation discussions in the Gulf. At the same time, sectors that have delivered the strongest returns continue to attract further investment, while those that proliferated across portfolios must now become leaner, more focused, and genuinely commercially rigorous.
This shift is not a break from the Gulf's broader transformation agenda — it is an acceleration of its most strategic priorities. National agendas across the GCC, particularly in Saudi Arabia, will continue to drive infrastructure spending as a structural baseline. But portfolio companies outside those flagship infrastructure programs are now operating under a different expectation: they must demonstrate real operational value creation, not just growth narratives.
This comes at a particularly telling moment. Over the last 12 to 24 months, the focus in countries like Saudi Arabia has visibly shifted from deploying capital at scale to harvesting returns from already-deployed investments. The question being asked inside boardrooms — and by international investors flying in from New York, London, and beyond — is no longer simply "where is capital going?" but "what is capital actually producing?" You can hear Eyad Faraj develop this framework in full on Beyond the Deck on Listenly.
What is operational value creation?
In the Gulf private equity context, operational value creation refers to measurable improvements in a company's underlying business — cost discipline, revenue quality, management accountability — as opposed to financial engineering or macro-driven valuation gains. As Eyad Faraj frames it, international investors entering Gulf businesses are now pushing for this kind of rigor in companies where, historically, CEOs answered only to family members on the board.
"This is a private business where CEOs never had to answer to anybody but himself and his family members who sit on the board. And all of a sudden, you have an international investor who says, I love what you've done with the business, but these are my ideas."— Eyad Faraj, Partner, Roland Berger
About Eyad Faraj
Eyad Faraj is a partner at Roland Berger, based in Bahrain and active across the entire GCC region. He leads work within the firm's transaction and investor services practice, advising on deals, capital allocation, and value creation in one of the world's most dynamic investment landscapes.
What sets Faraj apart from a conventional strategy consultant is the breadth of his investment experience. He has seen the Gulf from inside capital markets and investment banking before bringing that practitioner's lens into consulting — giving him a 360-degree view of how capital actually moves through the region, from sovereign vehicles like PIF and Mubadala down to privately held family businesses.
Being originally from Bahrain and having worked both inside and outside the Gulf means Faraj understands the governance dynamics, cultural expectations, and strategic ambitions that international investors often miss on a first visit. On this episode of Beyond the Deck, that dual perspective shapes every answer he gives — including on how geopolitics is now forcing a genuine rethink of where Gulf capital flows, and why sectors like defense and food security are no longer secondary priorities.
See also
Gulf sovereign capital will remain globally active, but its role is shifting. The first phase — where sovereign vehicles like PIF funded domestic economic transformation — is giving way to a more selective, return-oriented approach to deploying capital abroad.
Management talent has historically been imported from abroad for knowledge transfer, with the goal of upskilling local populations to eventually take over. This dynamic remains a structural consideration for private equity portfolio companies operating in the Gulf.
Foreign investors often underestimate layers of complexity that do not appear in standard due diligence. These include the limited bandwidth of management teams and the particular governance dynamics of family-owned businesses across the region.