Middle East strengthens position in global private markets

By Divya Shah

The Middle East is undergoing a transformation from a source of global private market capital to an increasingly attractive destination for private investment, according to a new research released by BlackRock’s Aladdin. 

The research, Market Evolution: The Middle East, highlights growing investor confidence, rising domestic capital deployment and expanding opportunities across sectors such as technology, infrastructure and digital infrastructure. 

Middle East sovereign wealth funds are allocating a larger share of their portfolios to private markets than their global peers. Data from Preqin shows that sovereign wealth funds in the region allocate 43% of their exposure to private capital, compared with 35% among investors elsewhere. 

The share of Middle East-based limited partners (LPs) that are either positive on or considering private equity mandates has risen from 70% in 2019 to 83% in 2026. By comparison, the equivalent figure for LPs outside the region has only increased marginally, from 60% to 61% over the same period. 

Ayman Daif, Managing Director and Head of Aladdin Business Development for the Middle East, Central Asia, Africa and India, said the region is experiencing a structural shift in how capital is deployed. 

He noted that investment is increasingly being channelled into domestic opportunities while institutions and supporting ecosystems continue to mature. According to Daif, collaboration between sovereign wealth funds, family offices and global investment managers, combined with broader adoption of technology and data-driven investment approaches, will shape the next phase of growth. 

The research also points to investment activity expected across the Gulf region. Research from the BlackRock Investment Institute suggests GCC countries could invest approximately $2.1 trillion by 2030, with spending focused on strengthening economic resilience and reducing exposure to disruptions across trade, shipping and energy markets. 

  Saudi Arabia and the UAE have emerged as the region’s leading private capital markets, supported by economic diversification programmes, infrastructure development and increasing institutional sophistication. Saudi Arabia accounts for more than 60% of all Middle East-based funds closed since 2015, reinforcing its role as the region’s primary fundraising hub. 

The research highlights the growing influence of Saudi Arabia’s Public Investment Fund (PIF), which has accelerated domestic deployment and surpassed international investors in direct deal activity across the Middle East in 2023, maintaining that lead in subsequent years. 

Infrastructure remains a key investment theme across the region. Investors are increasingly targeting opportunities in energy, utilities, transport and digital infrastructure, including data centres and AI-related projects, as governments and institutions seek to support long-term economic transformation. 

Family offices are also playing an increasingly prominent role in shaping the investment landscape. The research finds that family offices account for nearly half of active private capital investors in the Middle East, making them the region’s largest investor group since 2023. 

Private equity remains their preferred asset class, representing 27% of future investment mandates, ahead of real estate (19%), private credit (16%), infrastructure (14%), hedge funds (13%) and natural resources (11%). 

The research additionally highlights the resilience of the region’s venture capital ecosystem. Middle East venture capital deal value averaged $2.4 billion annually between 2021 and 2025, remaining relatively stable despite a more challenging funding environment in the US and Europe.  

Meanwhile, buy-and-build strategies are gaining momentum across the region, with add-on acquisitions increasing from 20% of total buyout activity in 2020 to 46% in 2025, reflecting growing market maturity and consolidation opportunities. 

The findings underscore the Middle East’s evolution into a more sophisticated private markets ecosystem, supported by sovereign wealth funds, family offices, technology adoption and large-scale infrastructure investment.  

As capital increasingly remains within the region, opportunities are emerging for private equity, venture capital and infrastructure investors seeking exposure to one of the world’s fastest-growing investment markets.