Will Gulf sovereign wealth funds continue to be a source of capital for companies in the US, Europe, or Silicon Valley?
Gulf sovereign capital will remain globally active, but its role is shifting. The first phase — where sovereign vehicles like PIF funded domestic transformation to get the wheels in motion — is transitioning into a phase of inviting foreign capital into the region, rather than exclusively exporting it. Gulf funds will continue to allocate to developed markets like North America and Europe, as well as to emerging economies, as part of maintaining a well-balanced portfolio, but domestic deployment and co-investment structures are becoming more central to the strategy.
What is MSCI inclusion — and why does it matter here?
The Gulf region is now part of the MSCI Emerging Markets Index — the Morgan Stanley Capital International benchmark tracked by trillions of dollars in global funds. This makes the Gulf a mandatory allocation for any global emerging market investor, not an optional bet. Combined with dollar-pegged economies that eliminate foreign exchange risk entirely, the structural case for international capital entering the region is stronger than it has ever been.
Over the last 10 to 15 years, Gulf capital deployment shifted away from hydrocarbon-led public spending toward domestic economic diversification, with non-oil GDP becoming the defining benchmark of success. In the last 8 to 10 years specifically, the first transformation phase was sovereign-vehicle-led: institutions like PIF, Mubadala, and QIA absorbed risk domestically to kickstart growth before foreign investors arrived. That phase is now maturing. Over the last 12 to 24 months — particularly in Saudi Arabia — the focus has shifted from deploying capital to harvesting it: generating returns from investments already made, and demonstrating those returns to a global audience.
The macro fundamentals reinforce this shift. Gulf GDP growth runs well above global averages, and dollar-pegged currencies remove the FX risk that typically discourages foreign capital from flowing into emerging markets. Stock exchanges like TADAWUL and the ADX are no longer peripheral venues — they are now part of the global index infrastructure that institutional investors must engage with. Explore the full episode on Listenly to hear how Faraj maps the transition from capital exporter to capital destination.
"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 · Beyond the DeckAbout Eyad Faraj
Eyad Faraj is a partner at Roland Berger within the transaction and investor services practice, based in Bahrain and operating across the GCC. His perspective on Gulf capital is grounded in direct experience across three distinct vantage points: capital markets, investment banking, and strategy consulting — a combination that allows him to assess deals not just as a consultant advising from the outside, but as someone who has observed capital flows from within the financial system itself.
Originally from Bahrain, Faraj brings a dual insider-outsider lens to Gulf investment dynamics: he understands the cultural and structural specificities of the region while remaining fluent in the expectations and frameworks that international investors bring to the table. This positions him as a credible interlocutor for both sides of the capital conversation — Gulf sovereign institutions deploying domestically, and foreign investors trying to navigate a market that operates by its own rules.
His work at Roland Berger focuses specifically on transaction advisory and investor services across the Gulf, making him a direct practitioner in the shift he describes: from a region that sent capital abroad to one that is now actively competing to attract it.
See also
Management talent has historically been imported from abroad for knowledge transfer, with the goal of upskilling local populations to eventually take over — a model that is gradually evolving as Gulf nationals gain more hands-on experience in private sector roles.
Foreign investors often underestimate layers of complexity that do not appear in standard due diligence. These include the limited bandwidth of management teams and cultural dynamics that require a different approach than what works in Western markets.
Governance is the first and most critical layer international investors must assess before committing capital in the Gulf. Many target companies are private family-owned businesses whose leadership has never had to answer to external shareholders, creating significant friction when international investors seek to influence strategy and operations.