May 22, 2025 • 21 mins
Francine Lacqua hosts this week's episode from the Qatar Economic Forum in Doha, where she and guests Matthew Martin, a Bloomberg senior reporter covering sovereign wealth funds, and Bloomberg deals reporter Dinesh Nair, discuss the wave of dealmaking emerging from the Middle East.
Following US President Donald Trump’s recent visit to the region, the White House announced that Saudi Arabia, Qatar and the United Arab Emirates have made over $1 trillion in new economic commitments to the US, albeit with few details. These proposed deals are to span a range of key sectors, from defense and aviation to artificial intelligence. If completed, they would signal a major push toward strategic partnerships and long-term diversification.
In this episode, we explore how business leaders are interpreting Trump's trip and what the region's evolving relationship with the US means to the investment landscape going forward.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:18):
Welcome to you in this city.
Speaker 1 (00:19):
Now each week we unpack a story that's crucial to
the world's financial capitals.
Speaker 2 (00:23):
I'm from sin.
Speaker 1 (00:24):
Laclaw and this week we're recording the show from the
fifth edition of the Qatari Economic Forum in Doa. So
it only seems appropriate to zero in on this massive
wave of deal making emerging from the Middle East. Now,
following President Trump's recent high profile visit to the region,
the White House claims that Saudi Arabia, CATTER and the
United Arab Emirates have made over trillion dollars in new
(00:46):
economic commitments.
Speaker 3 (00:47):
Now.
Speaker 1 (00:47):
These deals, of course, span a range of key sectors, defense, aviation,
artificial intelligence, really signaling this major push towards strategic partnerships
and long term diversification. Now, in this episode will take
the pulse of the forum. You can see it's very
noisy as people also talk around me. We explore how
business leaders are reacting to the latest deals and what
(01:09):
it could mean for the region's investment landscape going forward. Well,
to unpack all of this, and there's a lot to unpack.
I'm delighted to be joined by Matthew Martin, Bloomberg's chief
correspond for MINA Sovereign Wealth Funds and Nationnaire Bloomberg's chief
correspondent for Global Deals.
Speaker 2 (01:24):
Welcome to the City of London, the city of the
City of London. Please mind the gap between the tree
and the financial hearts of the country, the city, the city.
Welcome in the city.
Speaker 1 (01:47):
Bend care of the doors. So good to have you
on the podcast. We can hear each other. But the
buzz is incredible actually here at the Catar Economic Forum.
Speaker 4 (01:57):
Yes, itcuse and it's great to see so many people
lining up and do this and more than two thousand,
fiveundred delegates. It's a lot of excitement, a lot of
vibe in the region, which is what you kind of
see whenever you come to the Middle East and know
in the last few years that's been the big change.
Speaker 1 (02:11):
Yeah, but then with President Trump noither actually showing up
last week, I mean it's incredible people talk about deals, right,
Is this real money?
Speaker 2 (02:18):
Is this real deals?
Speaker 1 (02:19):
Or is this you know more terms of understanding? Is like, yeah,
we'll work on it, We'll work on AI. Or is
this region going to get a lot of flows quite quickly?
Speaker 5 (02:28):
Well, I think I was at the Trump's visit to
read last week, and there was a whole host of
numbers that were being thrown out by people. You know,
Initially they said that there was six hundred billion dollars
of investments. Then there was announce from the stage there
was three hundred billion dollars. Then the Crown Prince and
President Trump as well said that there was a plan
to get to a trillion dollars.
Speaker 2 (02:49):
So you know where this number actually is going to
end up. I think it's going to be anyone's guests
over the next few years.
Speaker 5 (02:54):
But I think what's what's what's clear is there is
this very real change in mood between the region and
the US. Relations under the Biden administration were strained at times.
The region was sort of flirting with China and boosting
trade and investment flows with China. Now I think that,
you know, following Trump's visit, it's really sort of said that,
(03:15):
you know, this money, they want it to be flowing
into the US. They really value that partnership, and particularly
around those things you mentioned, like diversifying the economy, going
into technology, and to defence. All these areas are definitely
going to be sucking up a huge amount of capital
out of this region.
Speaker 1 (03:29):
And I mean they all lead money, right, So it's basically,
you know, the GCC countries cat are saying, we have money,
but we'd probably like it to be more invested in
the region rather than going abroad. But the US also
trying to attract funds. So it's like they're they're you know,
friendly but competing.
Speaker 4 (03:45):
Yes, it is, and it's actually quite an exciting, you know,
interesting mix of the needs of different countries. If you
look at Saudi Abia for instance, they need a lot
of capital in the country. They're going through a big
interest such as spending boom, they're creating the city as
we know from scratch, so there's a lot of money
required in the country itself. So this the number which
(04:05):
has been put out, has raised some question marks on
whether where is that money going to come from because
you're spending so much in your domestic economy.
Speaker 3 (04:12):
I think Cutter and UA are a bit different.
Speaker 4 (04:15):
If you look at UA for instance, you know the
infrastructures already in place and their big ambition is to
diversify the economy and so they have a huge requirement
you know, to get access into chips and also like
build out their artificial intelligence industry in Cutter even it's
kind of remains similar. They're going to get huge inflows
in the next couple of years, you know, from the
(04:36):
LNG at sports and it's a small country, so why
do you deploy that? And US becomes a natural home
for them. So I think the dynamics are a bit
mixed for different countries here.
Speaker 3 (04:44):
I'm actually I've.
Speaker 1 (04:45):
Been thinking about Salt because it feels like, you know,
you have president of the United States that wants to
do deals, so this is not only about money. This
is almost like a strategic geopolitical alliance. So how much
were the deals announced in the region last week about
keeping President Trump on side and how much of it
is actually just pop point in cabro and putting it
to work.
Speaker 2 (05:04):
You know, there's clearly a very real part of this.
Speaker 5 (05:07):
And the sort of announcement inflation that you saw of
each of the countries that he visited around the region
wanting to one up the previous one and announce more
and more. Yeah, I think a lot of that is about,
you know, understanding a very transactional US administration and knowing
that they can they can play that game to their
advantage because they often have these big sobign mode funds
(05:28):
that can deploy capital and can make these big long
term commitments. So look, some of that is going to
be a bit nebulous and is possibly not going to
see the light of day. But you know, I think
as well, they see that diversifying their economies. They see
that building an AI industry, becoming hobs for these sorts
of things, you have to partner with the US for it.
(05:50):
And as much as there has been all the noise
around sort of deep seek and how much that sort
of changes the equation around AI investments, ultimately I think
everybody sees the future of AI has come out of
the US, and so that's where they want to build
those partnerships. And also, you know, linking into that, the
region has been very keen on getting defense agreements and
security pats with the US, and so buying a lot
(06:13):
of American hardware helps knit them into that American defense
complex to set the ground for trying to do those
broader geopolitical deals over the course of this administration, which
I think is going to be one of the big goals.
Speaker 1 (06:27):
But also if you look at some of the biggest
sovereign wealth funds in the world. They sit in this region,
and this is because of the revenue from more oil
and gas, which will probably only increase. We heard also
here from Katar that will increase. We spoke to the
Kuwaiti Southern Wealth Fund. How much more money will they
have to put to work in the coming years thanks
to revenue?
Speaker 5 (06:46):
Yeah, I think and as Danish was hinting at this
a bit earlier on, you know, and we had a
story the other week that Saudi Arabia has got about
two trillion dollars worth of domestic commitments that it's on
the hook for make and space.
Speaker 2 (06:58):
Some of that out maybe, but clearly.
Speaker 5 (07:01):
The big push within Saudi Arabia is gonna be domestic investments,
and so the amount of capital that can go outside
of the country is going to be more limited compared
to a place like Doha where we are, where they've
got these big gas fields coming on stream in the
sort of year or two ahead. That's going to be
giving the Qia this massive new war chest that they're
(07:22):
going to have to deploy. And you know, they're talking
about a five hundred billion dollar commitment into the US
over the course of the next five years or so.
And that's I mean that probably has some sense of
reality to it. You know, they are going to be
having to digest more and more capital coming into the
fond and the US is going to be a great
place to try and digest some of that.
Speaker 2 (07:41):
Similarly in Kuwait as well.
Speaker 5 (07:44):
You know, we had the head of the Kia on
the stage earlier on today.
Speaker 2 (07:48):
You know, he was talking.
Speaker 5 (07:49):
He was less effusive about making big commitments and pledges
to the US, but you know he was clearly saying
that you are underweight the US at your peril, and
so you know this is a sign that you So
I think both of these funds.
Speaker 2 (08:01):
And also Abbadabi as well, are going to.
Speaker 5 (08:03):
Be continuing to look to put lots and lots of
money at work into the US.
Speaker 2 (08:07):
Yeah, how do they put that capital actually to work?
And again in the US.
Speaker 1 (08:11):
Given the volatility that we've seen, you know, and the
valuations that have been frankly all over the place, like
what is our natural home for this capital to end
up in the US.
Speaker 4 (08:20):
So I think a lot of them actually put money
into public equities and I would think that will continue.
So if you think about cutoff, for instance, saying find
it billion dollars of commitments over the next ten years.
That's fifty billion on average every year. And if you
buy the SNP some of the biggest companies that you
can deploy quite a billion a few billion dollars into that.
Speaker 3 (08:38):
That will continue, But I think.
Speaker 4 (08:39):
They're also looking at into the AI infrastructure space. A
lot of them are interested in healthcare, so that's a
big sector that they're focused on. Is to understand, you know,
and develop their own industry back home. You know, you
need to kind of invest in that sector. So it's
quite a lot of money going to that. Power is
a big space because it's obviously powering. You know, you
need electricity to and me the AI demand. So there's
(09:01):
quite a few areas that would invest in. But if
you think about someone like a Qia of for instance,
a Abadla, you'll see potentially it's been a bit more
direct investments, which they've not been doing in the past,
so that thing, I think that that would go up
a little bit. And then you know the normal cost
of business investing in the treasuries and public equities that
which they've been doing for a few years. That will
(09:22):
continue as well, but still a big number. I think
for me, what is kind of interesting is that if
they're all chasing the same assets from the same region,
trying to kind of lobby the same person in the administration,
do they end up paying a little bit more like,
you know, is we're going to be competition from this
region for the same assets. You know, that's something which
will be interesting to watch in the coming years.
Speaker 1 (09:42):
I mean, it's interesting because there's also a new head
of the QIA that's much more familiar actually with US, thankulity.
So I wonder whether that changes the investment profile of
the cybern Mouth Fund.
Speaker 5 (09:53):
Yeah, I think you're clearly from the comments about the
commitments that they're willing to make into the US and
a lot of the talk around the event today has
been very uh, there's been a very America first agenda,
I think among a lot of the panelists, and I think,
you know, if you look at the QIA, they're clearly
buying into a lot of that trumpanomics, looking at investing
(10:18):
not just into some of these things that the sort
of the the stuff we've talked about around AI and
those sorts of technology and the sort of you know,
the future industries, they're also talking about investing into the
reindustrialization of the US, which is you know that that
whole Trump goal of bringing manufacturing and bringing those jobs
back into the US and bringing the supply chain for
(10:40):
American goods back into America, so that they sound very
optimistic about wanting to play that trade as well, which
you know is something that people have had some concerns
about how how realistic that might be. But yeah, I
think you know, the fact that the head of the
QIA now had spent years and years running the US
means he's obviously very familiar with the economy, very familiar
(11:02):
with the investment scene there and all the people that
he needs to be in contact with. And so I think,
you know, that's why they're making this decision that they
are going to be They're going to be very very
supportive of the Trump administration's goals over these four years.
Speaker 2 (11:15):
Danish, how do you see.
Speaker 1 (11:16):
This ending up again if you will get equity? I
mean there's a lot of talk about private credit, private
equity is there already?
Speaker 2 (11:24):
It's early days again.
Speaker 1 (11:25):
Trump just left the region like four days ago, but
is there an indication of them going more into alternatives?
Speaker 4 (11:32):
There's clearly a push for alternatives though some people especially
they had the the QIICO who kind of mentioned that
private credit seems a little bit crowded now, but clearly
there's a lot of push towards private equity. So that
traditionally how these funds have invested in private equity was
either through investing in the funds itself or partnering with
(11:53):
some of the large private equity films so looking to
commit capital into buying business in the US, and they
would come in as a minority investor, and that they've
been doing for a while. Because they're also like the
biggest l priests to some of these funds, they've always
got like a bit of proferential access. They get co
investment opportunities, they're the first ones to see these deals.
And in a world where there's not so much money
floating around the Middle East as an LP base over
(12:15):
the years has become very important for the private agreedy firms,
so it's not a market they can ignore. That's why
we're seeing a lot of private EGREDI firms announcing that
they're setting up shop in Abu Dhabi or in Kata
or in Rear. That's because they understand that the money
for some of those big investments they need the equity
check is coming from this region, so I think that
would continue to improve.
Speaker 3 (12:34):
The only few of them.
Speaker 4 (12:35):
I don't think a lot of them are keen on
buying majority stakes and owning businesses outright because they just
don't have the manpower and the operational capabilities to run
businesses per se. But they do get twenty persons take
and a big business and they get a saying that
they get a board seed. That's how I think the
alternative push is going to go into it. Plus there's
also like you know, if you look at someone like
(12:56):
an idea, there is a push to do investments more
into hedge funds.
Speaker 3 (12:59):
You know, we keep we understand.
Speaker 4 (13:00):
They're looking at a lot of company a lot of
money into different strategies. So those that will continue as well.
Speaker 1 (13:06):
Infrastructure, AI, Sports, I mean, I guess there's still a
big posh also because of the young population here to
own sports teams.
Speaker 2 (13:14):
Is it football or it could also be others.
Speaker 5 (13:17):
Yeah, well, I think we're going to see sports continue
to be a big theme across the region. You know,
I think sports has been emerging much more as a
sort of investable asset class over the last few years
than it has been in the past. Obviously, you know
the PIF's investment and creation of Live and they sort
of plan maybe if they can get dealed on to
(13:39):
merge with the PGA. You know that that's another big
push by the PIF to get into into the US
sports scene. And there's you know, sort of talk around
changing some of the rules around ownership of American sports teams,
which opens up the door to these.
Speaker 2 (13:53):
Sort of private extuity players.
Speaker 5 (13:54):
And I think, you know, one of the things that
we've heard from some of the sessions today is that
the sovereigns out of the region can afford to be patient,
and they can afford to take some time investing in
these things which maybe don't return a huge amount of
money in a typical sort of three to five year
private acuity period, but if you look at that longer
sort of ten to fifteen years, then they could be
(14:16):
really they could be both financially viable and they play
this great role for promoting the region and promoting the
region is a place to invest, a place to holiday,
a place to visit, promote that sort of understanding as well,
and that those sort of soft power links which is
increasingly a role that the sovereigns out of the region
are playing. You know, they used to be you know,
(14:39):
fifteen twenty years ago, the sovereign funds were all saying, look,
we're not political actors, We're purely investing for financial returns.
And now, you know, I don't think anybody bothers making
that argument.
Speaker 2 (14:49):
I think you know it.
Speaker 5 (14:50):
Clearly they are in They are playing a role in
state craft and a role in soft power.
Speaker 1 (14:56):
Projection, which is also why we saw a lot of
the trophy assets, right the like Herod's or PSG or
some of these big brands that was cool to own
if you have a lot of money. So like you
you're the new kid in town. It's like suddenly you
have a brand that everybody recognized and either just like
staying there or shopping there or watching Will that continue?
Speaker 2 (15:15):
Yeah? I think so.
Speaker 5 (15:17):
You know, if you look at the sort of Oscar
Wild quote of you know, the only thing worse than
being talked about is not being talked about.
Speaker 2 (15:24):
And so you know, I think that that's part as.
Speaker 5 (15:26):
Your father by Deneh, and that's part of sort of
inserting themselves into the conversation and things like you know,
Harods and things like.
Speaker 2 (15:34):
You know, all the money that gets.
Speaker 5 (15:35):
Poured into hosting sporting events in the region, it makes
you part of the conversation. You know, nobody has written
more about Saudi Arabia since these live golf and the
investments into the Premier League get into bringing Premier League
players to Saudi Arabia. So, you know, I think that
that that's all part of because of elevating the the
(15:55):
role and the knowledge that of these countries are all
around the world.
Speaker 4 (15:59):
Yes of sports is soft power, as Matt mentioned, and
that's been a big factor for buying into some of
these It's not just the financial returns, you know, see
increasing that we see these funds trying to buy influence
as well as you know, when they buy assets, it's
also like what kind of influence that can get in
a certain administration or a certain region. So there's a
bit of that thinking going behind and the fact that
(16:21):
they can own some of these assets for longer periods
of time, you know, compared with the private equity firm
give some the ability to kind of withstand losses, you know,
through cycles, So that kind of that that's something that
one days they have, so you kind of I think
we'll continue to see sports investments. We saw a period
and QI a kind of stepped away from making these
you know, trophy asset investments uh and kind of went
(16:43):
into a lot more venture capital investment in early tech investments.
But we kind of think like with the more influence
coming in over the less two years, so we'll kind
of see bigger deals.
Speaker 3 (16:52):
Uh.
Speaker 4 (16:53):
And it has to be like, you know, like some
of the big assets you know that turn become trophy
assets to maybe continue to see that as well.
Speaker 1 (17:00):
I mean, there was a wave where there was a
lot more scrutiny great and that's coming gone about some
of the money from certain parts of the world going
for example, to London to New York.
Speaker 2 (17:10):
Where are we on that?
Speaker 4 (17:12):
I think there were some reports about some of these
investments which was promised to the Trumpet administration and the
some ipro's being raised in the US about what does
this mean for some of our core assets. I'll be
giving too much access to Middle East and investors, so
that there will be that screwtinay doesn't go away. But
I think you know, when you have an administration on
(17:33):
your side, and when you have someone who is so
transactional and who wants to kind of see investments being
made into the country. I think there is a bit
of levy in that. I don't think so. During the
Biden administration, Sophius was a big concern for Seals funds,
like they were lobbying to try and see how can
we get access to US ASS without Sephius blocking some
(17:54):
of these deals. And overall it seems like the regulatory
environment in the US is a bit more friendly now.
Uh So, I guess it's less of a concern now,
but these things always come and go.
Speaker 1 (18:04):
Yeah, yeah, and Matthew also the way for him, I
mean even Qatar, but other you know, countries in the
region straddle I guess, a friendliness with the US in
terms of investments, but also the China. At some point
do they have to choose or are they being asked
to choose between the two if there are the two
biggest rivals on Earth.
Speaker 5 (18:22):
Look, I think under the Biden administration, certainly the rhetoric
then was that I think the region was being asked
to choose, and without dangling the carrot in front of
them as to why they should be choosing the US,
I think there was much more openness to to engage
with China. You know, China is the biggest trading partner
(18:45):
purely because of oil and how much China is buying
from this region, So you know, the Gold States have
to do something with China. I think, you know, the
US would like to see that limited though. I think that,
you know, the challenge is going to be after the
last couple of days, we've seen these ginormous US investment pledges,
and we sort of talked a bit earlier about the
(19:06):
fact that there's a lot of skepticism about how real
some of that is. I think the question is going
to be, you know, in five ten years time, how
much have we seen those turn into real investments and
how much do we see that Ultimately, a lot of
Chinese companies have come in and swamp the market quietly,
without these big headlines and without these ginormal state visits,
and they just quietly come in and gobble up the market.
And I think that's something that you know, we're gonna
(19:27):
have to watch over the next few years.
Speaker 3 (19:28):
Yeah, I agree with that.
Speaker 4 (19:29):
I think they will choose the US and they will
invest with China without making headlines. So it's kind of
a way where the headline grabbing announcements won't be with
Chinese companies. But if you look at this region, where
does Aramco sell most of it's oil too, it's to
Asia where does Cutters sell their most of the gas
toots to China, So they're the biggest market.
Speaker 3 (19:48):
It's very hard for them to ignore it.
Speaker 4 (19:50):
And we've seen a lot of Chinese investment come into
the region and they're very serious about it.
Speaker 3 (19:55):
But it just won't be.
Speaker 4 (19:56):
At the the you know, like the headline dabbing investments
that we see to the US.
Speaker 1 (20:01):
Yeah, and I understand to Maage's point, you know, but
let's say even twenty or thirty percent of what was announced,
you know, it becomes real money, and it's a lot,
it's a lot of cash, it's a lot of like
investments to be deployed.
Speaker 2 (20:12):
Is that are those deals that have.
Speaker 1 (20:14):
Been taken away from the UK and Europe because there's
there's not an infant amount of capital, So is the
money being used here you know, couldn't have been used elsewhere?
Speaker 4 (20:25):
Yeah, I mean I think in a way Europe had
has had in the last few years, kind of lost
those investments. There is a feeling today that Europe is
cheap so I would expect some money to go into
the US. Was interesting, the governor of PIF made a
commitment to invest more money to the.
Speaker 3 (20:43):
US sorted to Europe.
Speaker 4 (20:44):
Haven't seen that in a long while, but it just
it would be I mean, you can also argue that
there'll be money going to India, a bit going to
Indonesia as well. I don't think Europe will be at
the top of the of the list, so they definitely
seem to be missing out on some of these opportunities.
Speaker 1 (21:00):
Matthew, thank you so much for joining us. Well thanks
for listening to this week's In the City from Bloomberg.
This episode was hosted by me franc Laqua in Qatar,
was produced by Somersadi Moses and dam and Tala Maddi.
Brandan Francis Mnham is our executive producer. Special thanks to
Donationchnaier and Matthew Martin. Please subscribe, rate, and review wherever
(21:24):
you listen to podcasts.
Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2 (00:18):
Welcome to you in this city.
Speaker 1 (00:19):
Now each week we unpack a story that's crucial to
the world's financial capitals.
Speaker 2 (00:23):
I'm from sin.
Speaker 1 (00:24):
Laclaw and this week we're recording the show from the
fifth edition of the Qatari Economic Forum in Doa. So
it only seems appropriate to zero in on this massive
wave of deal making emerging from the Middle East. Now,
following President Trump's recent high profile visit to the region,
the White House claims that Saudi Arabia, CATTER and the
United Arab Emirates have made over trillion dollars in new
(00:46):
economic commitments.
Speaker 3 (00:47):
Now.
Speaker 1 (00:47):
These deals, of course, span a range of key sectors, defense, aviation,
artificial intelligence, really signaling this major push towards strategic partnerships
and long term diversification. Now, in this episode will take
the pulse of the forum. You can see it's very
noisy as people also talk around me. We explore how
business leaders are reacting to the latest deals and what
(01:09):
it could mean for the region's investment landscape going forward. Well,
to unpack all of this, and there's a lot to unpack.
I'm delighted to be joined by Matthew Martin, Bloomberg's chief
correspond for MINA Sovereign Wealth Funds and Nationnaire Bloomberg's chief
correspondent for Global Deals.
Speaker 2 (01:24):
Welcome to the City of London, the city of the
City of London. Please mind the gap between the tree
and the financial hearts of the country, the city, the city.
Welcome in the city.
Speaker 1 (01:47):
Bend care of the doors. So good to have you
on the podcast. We can hear each other. But the
buzz is incredible actually here at the Catar Economic Forum.
Speaker 4 (01:57):
Yes, itcuse and it's great to see so many people
lining up and do this and more than two thousand,
fiveundred delegates. It's a lot of excitement, a lot of
vibe in the region, which is what you kind of
see whenever you come to the Middle East and know
in the last few years that's been the big change.
Speaker 1 (02:11):
Yeah, but then with President Trump noither actually showing up
last week, I mean it's incredible people talk about deals, right,
Is this real money?
Speaker 2 (02:18):
Is this real deals?
Speaker 1 (02:19):
Or is this you know more terms of understanding? Is like, yeah,
we'll work on it, We'll work on AI. Or is
this region going to get a lot of flows quite quickly?
Speaker 5 (02:28):
Well, I think I was at the Trump's visit to
read last week, and there was a whole host of
numbers that were being thrown out by people. You know,
Initially they said that there was six hundred billion dollars
of investments. Then there was announce from the stage there
was three hundred billion dollars. Then the Crown Prince and
President Trump as well said that there was a plan
to get to a trillion dollars.
Speaker 2 (02:49):
So you know where this number actually is going to
end up. I think it's going to be anyone's guests
over the next few years.
Speaker 5 (02:54):
But I think what's what's what's clear is there is
this very real change in mood between the region and
the US. Relations under the Biden administration were strained at times.
The region was sort of flirting with China and boosting
trade and investment flows with China. Now I think that,
you know, following Trump's visit, it's really sort of said that,
(03:15):
you know, this money, they want it to be flowing
into the US. They really value that partnership, and particularly
around those things you mentioned, like diversifying the economy, going
into technology, and to defence. All these areas are definitely
going to be sucking up a huge amount of capital
out of this region.
Speaker 1 (03:29):
And I mean they all lead money, right, So it's basically,
you know, the GCC countries cat are saying, we have money,
but we'd probably like it to be more invested in
the region rather than going abroad. But the US also
trying to attract funds. So it's like they're they're you know,
friendly but competing.
Speaker 4 (03:45):
Yes, it is, and it's actually quite an exciting, you know,
interesting mix of the needs of different countries. If you
look at Saudi Abia for instance, they need a lot
of capital in the country. They're going through a big
interest such as spending boom, they're creating the city as
we know from scratch, so there's a lot of money
required in the country itself. So this the number which
(04:05):
has been put out, has raised some question marks on
whether where is that money going to come from because
you're spending so much in your domestic economy.
Speaker 3 (04:12):
I think Cutter and UA are a bit different.
Speaker 4 (04:15):
If you look at UA for instance, you know the
infrastructures already in place and their big ambition is to
diversify the economy and so they have a huge requirement
you know, to get access into chips and also like
build out their artificial intelligence industry in Cutter even it's
kind of remains similar. They're going to get huge inflows
in the next couple of years, you know, from the
(04:36):
LNG at sports and it's a small country, so why
do you deploy that? And US becomes a natural home
for them. So I think the dynamics are a bit
mixed for different countries here.
Speaker 3 (04:44):
I'm actually I've.
Speaker 1 (04:45):
Been thinking about Salt because it feels like, you know,
you have president of the United States that wants to
do deals, so this is not only about money. This
is almost like a strategic geopolitical alliance. So how much
were the deals announced in the region last week about
keeping President Trump on side and how much of it
is actually just pop point in cabro and putting it
to work.
Speaker 2 (05:04):
You know, there's clearly a very real part of this.
Speaker 5 (05:07):
And the sort of announcement inflation that you saw of
each of the countries that he visited around the region
wanting to one up the previous one and announce more
and more. Yeah, I think a lot of that is about,
you know, understanding a very transactional US administration and knowing
that they can they can play that game to their
advantage because they often have these big sobign mode funds
(05:28):
that can deploy capital and can make these big long
term commitments. So look, some of that is going to
be a bit nebulous and is possibly not going to
see the light of day. But you know, I think
as well, they see that diversifying their economies. They see
that building an AI industry, becoming hobs for these sorts
of things, you have to partner with the US for it.
(05:50):
And as much as there has been all the noise
around sort of deep seek and how much that sort
of changes the equation around AI investments, ultimately I think
everybody sees the future of AI has come out of
the US, and so that's where they want to build
those partnerships. And also, you know, linking into that, the
region has been very keen on getting defense agreements and
security pats with the US, and so buying a lot
(06:13):
of American hardware helps knit them into that American defense
complex to set the ground for trying to do those
broader geopolitical deals over the course of this administration, which
I think is going to be one of the big goals.
Speaker 1 (06:27):
But also if you look at some of the biggest
sovereign wealth funds in the world. They sit in this region,
and this is because of the revenue from more oil
and gas, which will probably only increase. We heard also
here from Katar that will increase. We spoke to the
Kuwaiti Southern Wealth Fund. How much more money will they
have to put to work in the coming years thanks
to revenue?
Speaker 5 (06:46):
Yeah, I think and as Danish was hinting at this
a bit earlier on, you know, and we had a
story the other week that Saudi Arabia has got about
two trillion dollars worth of domestic commitments that it's on
the hook for make and space.
Speaker 2 (06:58):
Some of that out maybe, but clearly.
Speaker 5 (07:01):
The big push within Saudi Arabia is gonna be domestic investments,
and so the amount of capital that can go outside
of the country is going to be more limited compared
to a place like Doha where we are, where they've
got these big gas fields coming on stream in the
sort of year or two ahead. That's going to be
giving the Qia this massive new war chest that they're
(07:22):
going to have to deploy. And you know, they're talking
about a five hundred billion dollar commitment into the US
over the course of the next five years or so.
And that's I mean that probably has some sense of
reality to it. You know, they are going to be
having to digest more and more capital coming into the
fond and the US is going to be a great
place to try and digest some of that.
Speaker 2 (07:41):
Similarly in Kuwait as well.
Speaker 5 (07:44):
You know, we had the head of the Kia on
the stage earlier on today.
Speaker 2 (07:48):
You know, he was talking.
Speaker 5 (07:49):
He was less effusive about making big commitments and pledges
to the US, but you know he was clearly saying
that you are underweight the US at your peril, and
so you know this is a sign that you So
I think both of these funds.
Speaker 2 (08:01):
And also Abbadabi as well, are going to.
Speaker 5 (08:03):
Be continuing to look to put lots and lots of
money at work into the US.
Speaker 2 (08:07):
Yeah, how do they put that capital actually to work?
And again in the US.
Speaker 1 (08:11):
Given the volatility that we've seen, you know, and the
valuations that have been frankly all over the place, like
what is our natural home for this capital to end
up in the US.
Speaker 4 (08:20):
So I think a lot of them actually put money
into public equities and I would think that will continue.
So if you think about cutoff, for instance, saying find
it billion dollars of commitments over the next ten years.
That's fifty billion on average every year. And if you
buy the SNP some of the biggest companies that you
can deploy quite a billion a few billion dollars into that.
Speaker 3 (08:38):
That will continue, But I think.
Speaker 4 (08:39):
They're also looking at into the AI infrastructure space. A
lot of them are interested in healthcare, so that's a
big sector that they're focused on. Is to understand, you know,
and develop their own industry back home. You know, you
need to kind of invest in that sector. So it's
quite a lot of money going to that. Power is
a big space because it's obviously powering. You know, you
need electricity to and me the AI demand. So there's
(09:01):
quite a few areas that would invest in. But if
you think about someone like a Qia of for instance,
a Abadla, you'll see potentially it's been a bit more
direct investments, which they've not been doing in the past,
so that thing, I think that that would go up
a little bit. And then you know the normal cost
of business investing in the treasuries and public equities that
which they've been doing for a few years. That will
(09:22):
continue as well, but still a big number. I think
for me, what is kind of interesting is that if
they're all chasing the same assets from the same region,
trying to kind of lobby the same person in the administration,
do they end up paying a little bit more like,
you know, is we're going to be competition from this
region for the same assets. You know, that's something which
will be interesting to watch in the coming years.
Speaker 1 (09:42):
I mean, it's interesting because there's also a new head
of the QIA that's much more familiar actually with US, thankulity.
So I wonder whether that changes the investment profile of
the cybern Mouth Fund.
Speaker 5 (09:53):
Yeah, I think you're clearly from the comments about the
commitments that they're willing to make into the US and
a lot of the talk around the event today has
been very uh, there's been a very America first agenda,
I think among a lot of the panelists, and I think,
you know, if you look at the QIA, they're clearly
buying into a lot of that trumpanomics, looking at investing
(10:18):
not just into some of these things that the sort
of the the stuff we've talked about around AI and
those sorts of technology and the sort of you know,
the future industries, they're also talking about investing into the
reindustrialization of the US, which is you know that that
whole Trump goal of bringing manufacturing and bringing those jobs
back into the US and bringing the supply chain for
(10:40):
American goods back into America, so that they sound very
optimistic about wanting to play that trade as well, which
you know is something that people have had some concerns
about how how realistic that might be. But yeah, I
think you know, the fact that the head of the
QIA now had spent years and years running the US
means he's obviously very familiar with the economy, very familiar
(11:02):
with the investment scene there and all the people that
he needs to be in contact with. And so I think,
you know, that's why they're making this decision that they
are going to be They're going to be very very
supportive of the Trump administration's goals over these four years.
Speaker 2 (11:15):
Danish, how do you see.
Speaker 1 (11:16):
This ending up again if you will get equity? I
mean there's a lot of talk about private credit, private
equity is there already?
Speaker 2 (11:24):
It's early days again.
Speaker 1 (11:25):
Trump just left the region like four days ago, but
is there an indication of them going more into alternatives?
Speaker 4 (11:32):
There's clearly a push for alternatives though some people especially
they had the the QIICO who kind of mentioned that
private credit seems a little bit crowded now, but clearly
there's a lot of push towards private equity. So that
traditionally how these funds have invested in private equity was
either through investing in the funds itself or partnering with
(11:53):
some of the large private equity films so looking to
commit capital into buying business in the US, and they
would come in as a minority investor, and that they've
been doing for a while. Because they're also like the
biggest l priests to some of these funds, they've always
got like a bit of proferential access. They get co
investment opportunities, they're the first ones to see these deals.
And in a world where there's not so much money
floating around the Middle East as an LP base over
(12:15):
the years has become very important for the private agreedy firms,
so it's not a market they can ignore. That's why
we're seeing a lot of private EGREDI firms announcing that
they're setting up shop in Abu Dhabi or in Kata
or in Rear. That's because they understand that the money
for some of those big investments they need the equity
check is coming from this region, so I think that
would continue to improve.
Speaker 3 (12:34):
The only few of them.
Speaker 4 (12:35):
I don't think a lot of them are keen on
buying majority stakes and owning businesses outright because they just
don't have the manpower and the operational capabilities to run
businesses per se. But they do get twenty persons take
and a big business and they get a saying that
they get a board seed. That's how I think the
alternative push is going to go into it. Plus there's
also like you know, if you look at someone like
(12:56):
an idea, there is a push to do investments more
into hedge funds.
Speaker 3 (12:59):
You know, we keep we understand.
Speaker 4 (13:00):
They're looking at a lot of company a lot of
money into different strategies. So those that will continue as well.
Speaker 1 (13:06):
Infrastructure, AI, Sports, I mean, I guess there's still a
big posh also because of the young population here to
own sports teams.
Speaker 2 (13:14):
Is it football or it could also be others.
Speaker 5 (13:17):
Yeah, well, I think we're going to see sports continue
to be a big theme across the region. You know,
I think sports has been emerging much more as a
sort of investable asset class over the last few years
than it has been in the past. Obviously, you know
the PIF's investment and creation of Live and they sort
of plan maybe if they can get dealed on to
(13:39):
merge with the PGA. You know that that's another big
push by the PIF to get into into the US
sports scene. And there's you know, sort of talk around
changing some of the rules around ownership of American sports teams,
which opens up the door to these.
Speaker 2 (13:53):
Sort of private extuity players.
Speaker 5 (13:54):
And I think, you know, one of the things that
we've heard from some of the sessions today is that
the sovereigns out of the region can afford to be patient,
and they can afford to take some time investing in
these things which maybe don't return a huge amount of
money in a typical sort of three to five year
private acuity period, but if you look at that longer
sort of ten to fifteen years, then they could be
(14:16):
really they could be both financially viable and they play
this great role for promoting the region and promoting the
region is a place to invest, a place to holiday,
a place to visit, promote that sort of understanding as well,
and that those sort of soft power links which is
increasingly a role that the sovereigns out of the region
are playing. You know, they used to be you know,
(14:39):
fifteen twenty years ago, the sovereign funds were all saying, look,
we're not political actors, We're purely investing for financial returns.
And now, you know, I don't think anybody bothers making
that argument.
Speaker 2 (14:49):
I think you know it.
Speaker 5 (14:50):
Clearly they are in They are playing a role in
state craft and a role in soft power.
Speaker 1 (14:56):
Projection, which is also why we saw a lot of
the trophy assets, right the like Herod's or PSG or
some of these big brands that was cool to own
if you have a lot of money. So like you
you're the new kid in town. It's like suddenly you
have a brand that everybody recognized and either just like
staying there or shopping there or watching Will that continue?
Speaker 2 (15:15):
Yeah? I think so.
Speaker 5 (15:17):
You know, if you look at the sort of Oscar
Wild quote of you know, the only thing worse than
being talked about is not being talked about.
Speaker 2 (15:24):
And so you know, I think that that's part as.
Speaker 5 (15:26):
Your father by Deneh, and that's part of sort of
inserting themselves into the conversation and things like you know,
Harods and things like.
Speaker 2 (15:34):
You know, all the money that gets.
Speaker 5 (15:35):
Poured into hosting sporting events in the region, it makes
you part of the conversation. You know, nobody has written
more about Saudi Arabia since these live golf and the
investments into the Premier League get into bringing Premier League
players to Saudi Arabia. So, you know, I think that
that that's all part of because of elevating the the
(15:55):
role and the knowledge that of these countries are all
around the world.
Speaker 4 (15:59):
Yes of sports is soft power, as Matt mentioned, and
that's been a big factor for buying into some of
these It's not just the financial returns, you know, see
increasing that we see these funds trying to buy influence
as well as you know, when they buy assets, it's
also like what kind of influence that can get in
a certain administration or a certain region. So there's a
bit of that thinking going behind and the fact that
(16:21):
they can own some of these assets for longer periods
of time, you know, compared with the private equity firm
give some the ability to kind of withstand losses, you know,
through cycles, So that kind of that that's something that
one days they have, so you kind of I think
we'll continue to see sports investments. We saw a period
and QI a kind of stepped away from making these
you know, trophy asset investments uh and kind of went
(16:43):
into a lot more venture capital investment in early tech investments.
But we kind of think like with the more influence
coming in over the less two years, so we'll kind
of see bigger deals.
Speaker 3 (16:52):
Uh.
Speaker 4 (16:53):
And it has to be like, you know, like some
of the big assets you know that turn become trophy
assets to maybe continue to see that as well.
Speaker 1 (17:00):
I mean, there was a wave where there was a
lot more scrutiny great and that's coming gone about some
of the money from certain parts of the world going
for example, to London to New York.
Speaker 2 (17:10):
Where are we on that?
Speaker 4 (17:12):
I think there were some reports about some of these
investments which was promised to the Trumpet administration and the
some ipro's being raised in the US about what does
this mean for some of our core assets. I'll be
giving too much access to Middle East and investors, so
that there will be that screwtinay doesn't go away. But
I think you know, when you have an administration on
(17:33):
your side, and when you have someone who is so
transactional and who wants to kind of see investments being
made into the country. I think there is a bit
of levy in that. I don't think so. During the
Biden administration, Sophius was a big concern for Seals funds,
like they were lobbying to try and see how can
we get access to US ASS without Sephius blocking some
(17:54):
of these deals. And overall it seems like the regulatory
environment in the US is a bit more friendly now.
Uh So, I guess it's less of a concern now,
but these things always come and go.
Speaker 1 (18:04):
Yeah, yeah, and Matthew also the way for him, I
mean even Qatar, but other you know, countries in the
region straddle I guess, a friendliness with the US in
terms of investments, but also the China. At some point
do they have to choose or are they being asked
to choose between the two if there are the two
biggest rivals on Earth.
Speaker 5 (18:22):
Look, I think under the Biden administration, certainly the rhetoric
then was that I think the region was being asked
to choose, and without dangling the carrot in front of
them as to why they should be choosing the US,
I think there was much more openness to to engage
with China. You know, China is the biggest trading partner
(18:45):
purely because of oil and how much China is buying
from this region, So you know, the Gold States have
to do something with China. I think, you know, the
US would like to see that limited though. I think that,
you know, the challenge is going to be after the
last couple of days, we've seen these ginormous US investment pledges,
and we sort of talked a bit earlier about the
(19:06):
fact that there's a lot of skepticism about how real
some of that is. I think the question is going
to be, you know, in five ten years time, how
much have we seen those turn into real investments and
how much do we see that Ultimately, a lot of
Chinese companies have come in and swamp the market quietly,
without these big headlines and without these ginormal state visits,
and they just quietly come in and gobble up the market.
And I think that's something that you know, we're gonna
(19:27):
have to watch over the next few years.
Speaker 3 (19:28):
Yeah, I agree with that.
Speaker 4 (19:29):
I think they will choose the US and they will
invest with China without making headlines. So it's kind of
a way where the headline grabbing announcements won't be with
Chinese companies. But if you look at this region, where
does Aramco sell most of it's oil too, it's to
Asia where does Cutters sell their most of the gas
toots to China, So they're the biggest market.
Speaker 3 (19:48):
It's very hard for them to ignore it.
Speaker 4 (19:50):
And we've seen a lot of Chinese investment come into
the region and they're very serious about it.
Speaker 3 (19:55):
But it just won't be.
Speaker 4 (19:56):
At the the you know, like the headline dabbing investments
that we see to the US.
Speaker 1 (20:01):
Yeah, and I understand to Maage's point, you know, but
let's say even twenty or thirty percent of what was announced,
you know, it becomes real money, and it's a lot,
it's a lot of cash, it's a lot of like
investments to be deployed.
Speaker 2 (20:12):
Is that are those deals that have.
Speaker 1 (20:14):
Been taken away from the UK and Europe because there's
there's not an infant amount of capital, So is the
money being used here you know, couldn't have been used elsewhere?
Speaker 4 (20:25):
Yeah, I mean I think in a way Europe had
has had in the last few years, kind of lost
those investments. There is a feeling today that Europe is
cheap so I would expect some money to go into
the US. Was interesting, the governor of PIF made a
commitment to invest more money to the.
Speaker 3 (20:43):
US sorted to Europe.
Speaker 4 (20:44):
Haven't seen that in a long while, but it just
it would be I mean, you can also argue that
there'll be money going to India, a bit going to
Indonesia as well. I don't think Europe will be at
the top of the of the list, so they definitely
seem to be missing out on some of these opportunities.
Speaker 1 (21:00):
Matthew, thank you so much for joining us. Well thanks
for listening to this week's In the City from Bloomberg.
This episode was hosted by me franc Laqua in Qatar,
was produced by Somersadi Moses and dam and Tala Maddi.
Brandan Francis Mnham is our executive producer. Special thanks to
Donationchnaier and Matthew Martin. Please subscribe, rate, and review wherever
(21:24):
you listen to podcasts.
Host
Francine Lacqua
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