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BlackRock is ramping up its commitments to the Gulf as the world’s largest asset manager seeks to boost exposure to a region that it expects to use more of its vast state wealth to invest domestically in the wake of the Iran war.
Despite no resolution to the conflict, now in its eighth month and keeping the Gulf in a state of suspended uncertainty, the firm is “undiminished in our focus” on the region, said Ben Powell, chief investment strategist for the Middle East and Asia-Pacific at the BlackRock Investment Institute.
Counterintuitively, the bullishness stems from the region’s relative stability: “In terms of the rules of the game, the positive attitude towards business, not to mention human capital, financial capital, energy … I feel very confident that this is a story that is true and real and going to play out over the next five, 10 years,” he said.
Stability “in a world of great moderation, that’s not that interesting,” Powell said. “But in a world of excitement, that becomes much rarer … it is worth 10 times what it was in a world where everything’s okay.”
And increasingly, everything is not okay. Powell’s broader outlook is that persistent inflation, fragmentation, and higher capital costs will make investors more selective. “We’re all going to be incorrect more often … Where you can find confidence, grab it with both hands because it’s in short supply,” he said.
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BlackRock, which manages more than $15 trillion, has offices in Abu Dhabi, Dubai, Riyadh, Doha, and Kuwait City. Powell said the Gulf will “continue to be a significant exporter of capital,” but that “at the margin, maybe some portion of that money that was going to flow out is going to stay at home.” He put the amount at $50 billion to $100 billion, and cautioned that the estimate has wide error bands. Powell tied that shift to the $2.1 trillion in strategic capital spending the institute estimates the Gulf states will make in its diversification push through 2030.
The bigger change, he said, is a focus on “societal and economic resilience” across energy, infrastructure, and the region’s build-out for AI, including “some projects where we hope utilization rates will be very low.”
Some of that spending is “almost an insurance policy,” Powell said: “We’re going to build pipelines we hope we never use.”
Through “a solely economic lens, that would not make much sense,” he said, but the need for redundancy as global geopolitical tensions rise means it makes “all the sense in the world.”
Powell also expects more spending where AI, energy, and defense overlap. “They’re all kind of the same thing now,” he said.
Step Back
BlackRock’s Global Infrastructure Partners is part of a $30 billion infrastructure partnership with Abu Dhabi sovereign wealth fund L’IMAD, national oil company ADNOC, and Singapore’s Temasek, announced in May.
The asset manager is among a growing number of global firms in Abu Dhabi’s financial center, ADGM, drawn by proximity to sovereign wealth funds like ADIA and Mubadala, family offices, and the region’s expanding appetite for private credit. Gulf capital is still flowing out at a record pace: the region’s sovereign wealth funds invested $53.9 billion across 108 transactions in the first half of 2026, an all-time high, according to Global SWF.
Notable
- Singapore’s Temasek will open its first offices in the Gulf early next year, joining a growing list of global investors expanding into the region despite ongoing conflict.
- OpenAI is in talks with BlackRock and UAE funds, including Abu Dhabi’s MGX, to raise as much as $30 billion, Bloomberg reported.