View / Miami draws Wall Street crowd still eager to do Gulf business

The Iran war has threatened Wall Street’s generational bet: That the Middle East could be what China promised and never delivered — a true growth market.

Deep-pocketed sovereign wealth funds and a rising class of new leadership — ambitious, tech savvy and able to speak the language of global finance — beckoned Western firms to the Gulf. Wage premiums for expat bankers narrowed as glamourous lifestyles, tax-free salaries, and decent education made the region seem less like a hardship posting and more like a career-boosting financial playground.

But whether that continues depends on how long the conflict drags on, and how much death and destruction it leaves in its wake. Trump officials are getting anxious that Gulf governments may withdraw tens of billions of dollars of investments in the US. “When these guys do that, it is going to be immensely destabilizing and contradictory to the president’s investment goals,” a person familiar with internal conversations told Politico.

Investment conferences in the region, which seemed to be happening every week, are getting cancelled or delayed. Gulf fund managers are already finding Western bankers less willing to travel to meet them. And it’s harder to convince junior bankers to move to the Gulf when the CEO won’t travel there.

Yet what is already clear here in Miami at this week’s Saudi investment confab, FII, where President Donald Trump is scheduled to appear in the Magic City tomorrow for the second year running, is that deals have not ground to a halt. Diversifying from oil and investing to shore up their alliances may be even more important for Gulf officials who are looking beyond the current conflict.

Wall Street’s moneymen still want to sit at the intersection of Middle East petrodollars and western capitalism. For now, though, they’d just rather do it from Miami.