Sponsors have long courted Gulf sovereign wealth. In 2025, the reward is greater than ever, but the courtship comes with more strings attached: establish a real local presence or miss out on commitments.
From Abu Dhabi to Doha, firms are scrambling to build a local presence, recruit professionals, and put money to work in the region.
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Preqin described the scale of efforts at recent forums in Doha and Kuwait City. Vice-president Paul Sinthunont said the Gulf’s manager roster has “nearly tripled since 2020,” with the United Arab Emirates and Saudi Arabia now the favored headquarters for international arrivals and local GPs.
Stonepeak opened in Abu Dhabi in September and has since agreed to a $1 billion partnership with the Arab Energy Fund. Miami-based I Squared Capital will launch a Riyadh office later this year to pursue energy-transition and digital-infrastructure deals—an expansion chair Sadek Wahba called “a strategic priority.”
Brookfield Asset Management, already managing roughly $13 billion in Gulf assets, has set a $2 billion target for a dedicated Middle East fund.
KKR has redeployed senior dealmakers to Dubai and Riyadh and recently appointed General David Petraeus as chair of its Middle East franchise. Permira, Warburg Pincus and CVC are following suit with expanded boots-on-the-ground presences of their own.
The incentive is clear. Preqin’s 2025 investor survey shows 79 percent of regional limited partners plan to increase private-equity allocations and 41 percent already deploy more than one-fifth of assets to the class. Fund administrator Citco reports that Middle East assets under administration have doubled to $250 billion over the last three years.
For U.S.-based sponsors or those otherwise exposed to tariffs, a deeper Middle East presence is also viewed as a possible safe harbor during a period of increased macro volatility.
Access, however, comes with tougher terms.
“Whereas before a firm might send their second in command, they are now sending the big guns, and they’re traveling here much more frequently than before,” Talha-Khan Aquil, managing partner at UAE-based placement firm Gulf Equity Partners, told Private Equity International earlier this year.
“Any firm looking to raise capital from these sovereigns will be in for the negotiation of their lives. They’re large enough to say to the GP: ‘If you don’t give us what we want, we’re willing to walk away.’” Co-investment ratios of 1:1.5 and fee concessions are becoming standard asks.
Regional sovereigns also want proof that newly opened offices are substantive. At the FII Priority gathering in Miami, Public Investment Fund governor Yasir al-Rumayyan reminded guests that capital must be matched by on-shore activity.
Qatar Investment Authority is applying similar leverage. “There is a different level of engagement when [the partners] are prepared to invest into the country and help diversify your own economy,” said Mohsin Pirzada, who oversees QIA’s fund programs. Managers unwilling to contribute locally have been rebuffed because their interest “was just really to tap into the capital,” he noted.
Relationship-building also now extends beyond office leases.
Local events like dinners or group outings have become commonplace. Other popular approaches taken by sponsors include investment professional training programs and local recruitment efforts.
In April, Bloomberg reported on a group of senior Carlyle Group leaders who made the trip to Abu Dhabi as part of an executive training session with counterparts across the emirate’s sovereign wealth funds. BlackRock has launched an early career program to hire Saudi talent for local front office roles, staffing the initiative with a cohort of investors relocated to the Kingdom from other locales.
While geopolitical concerns and oil price cyclicality are still cited as reasons for pause, most now seem to view the chance for firm-defining upside as too great to miss.
Or, as BlackRock president Robert Kapito called Saudi Arabia’s push, “the largest career alpha opportunity that I have ever seen.”