The U.S. and Europe feared the Iran conflict would curtail the Gulf’s appetite for global investments. The opposite is true

Gulf sovereign wealth funds collectively stepped up dealmaking over the last three months, defying expectations that the Iran war would subdue their investment appetite. The five biggest spenders–split across Saudi Arabia, the UAE and Qatar–collectively spent almost $26bn during March, April and May, with most of the capital flowing into developed market assets. They comprised Saudi Arabia’s Public Investment Fund (PIF), the UAE’s Mubadala, Abu Dhabi Investment Authority (ADIA) and L’imad, as well as the Qatar Investment Authority (QIA). “These vehicles…have shown no sign of slowdown (yet), with a stronger average pace in the past quarter, than in the five years before the start of the war,” industry specialist Global SWF said in its latest report published on 1 June. Read more: Property prices are down in Dubai. Is it a war-induced blip, or something more serious? The QIA was the only fund that dropped its pace, investing about $2bn less per quarter since March 1. The report noted that while capital has continued flowing into U.S. companies and funds, both ADIA and PIF showed a preference for investing in China and emerging markets. Since the start of the Iran war, PIF has invested $6.1bn in emerging markets, more than double the $2.43bn it has deployed in developed market assets. Adia has put $3.32bn into emerging markets and $1.58bn into developed market investment opportunities. However, the PIF’s focus is set to shift towards its domestic economy, with about 80% of its portfolio now focused internally. In mid-April, the near $1trn fund launched a new five-year investment strategy that will narrow its focus to six areas: tourism and entertainment; urban development; advanced manufacturing; industrials and logistics; clean energy and renewables infrastructure; and Neom–a multi-billion-dollar smart city and economic zone being built in the Tabuk province of northwestern Saudi Arabia. Meanwhile, in January this year, Abu Dhabi’s government brought together the Abu