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Sovereign investors across the Middle East are placing greater emphasis on energy security as they navigate an increasingly volatile global environment, according to a new analysis.
The 14th annual Invesco Global Sovereign Asset Management Study found that nearly nine in 10, or 89 per cent, of Middle East sovereign wealth funds surveyed identified energy security as a top investment priority, surpassing the global average of 80pc.
The report added that 67pc of Middle East investors identified critical infrastructure as another key investment priority, reflecting a growing emphasis on securing the physical and digital foundations of economic stability.
Earlier this month, another analysis from Bain & Co said that sovereign wealth funds in the region are entering a critical new phase in which strategic adaptation will determine their ability to sustain robust growth over the next decade.
This comes as Gulf sovereign investors place greater emphasis on resilience as they navigate geopolitical tensions, supply chain disruptions, and market volatility.
Josette Rizk, head of Middle East and Africa at Invesco, said: “Sovereign investors in the Middle East are taking a highly pragmatic approach to a more uncertain world.”
She added: “While resilience is not yet as deeply embedded as in some global peers, it is rapidly becoming a core consideration in how portfolios are built and managed.”
According to her, what stands out is “the clarity of the region’s investment priorities,” with energy security, infrastructure, and private markets forming the backbone of long-term strategy, alongside strong conviction in the transformative potential of artificial intelligence.
Every Middle East sovereign wealth fund surveyed expects the next decade to be more challenging than the previous two, compared with 69pc of sovereign wealth funds globally.
Although only 31pc of regional sovereign wealth funds currently rank resilience as a core investment priority, compared with 48pc globally, nearly half said resilience is becoming as important as returns in portfolio construction.
Among central banks, 56pc shared the same view.
This indicates a clear convergence between traditional return objectives and risk management considerations. Risk management frameworks are strengthening, with 80pc of sovereign wealth funds and 88pc of central banks relying on risk concentration monitoring – both above global averages.
Private markets continue to play an increasingly important role in regional sovereign portfolios.
All Middle East sovereign wealth funds surveyed identified private markets as a key driver of long-term returns, significantly above the 65pc global average.
Infrastructure is expected to attract the largest share of additional capital, with 70pc of respondents planning to increase allocations over the next 12 months.
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