Middle East sovereign wealth funds tracked by Preqin allocate 43% of their exposure to private capital, compared with 35% for their rest-of-world peers
Family offices now account for nearly half of active private capital investors in the Middle East, with private equity representing their largest area of investment interest
The Middle East is increasingly evolving from a major source of global private markets capital into a destination for private capital deployment, driven by growing investor conviction, rising domestic investment and expanding opportunities across sectors including technology and infrastructure.
A new BlackRock Aladdin report titled “Market Evolution: The Middle East” examines the allocations, deal activity and investor trends reshaping the region’s private markets, highlighting the growing role of local investors in deploying capital closer to home.
Middle East sovereign wealth funds (SWFs) tracked by Preqin allocate 43 percent of their exposure to private capital, compared with 35 percent for their rest-of-world peers, underscoring the region’s growing appetite for private market opportunities.
Regional conviction is growing well ahead of the global baseline
The share of Middle East LP investors positive on or considering private equity mandates has climbed from 70 percent in 2019 to 83 percent in 2026.
Among LP investors elsewhere in the world, that figure has moved only marginally over the same period, from 60 percent to 61 percent, showing regional conviction is growing well ahead of the global baseline.
“The direction of travel in the region points to a structural shift: capital is increasingly being deployed at home, and the institutions and ecosystems are being built around it. The next phase of growth will be shaped by continued collaboration between sovereign wealth funds, family offices and global investment managers, alongside broader adoption of technology and data-driven investment approaches,” said Ayman Daif, Managing Director and Head of Aladdin Business Development for the Middle East, Central Asia, Africa and India.
“This comes as BlackRock Investment Institute research suggests GCC countries will invest about $2.1 trillion by 2030, with spending focused on making economies more resilient to disruptions in trade, shipping and energy markets,” he added.
Saudi Arabia, UAE emerge as the region’s leading private capital markets
The report identifies Saudi Arabia and the UAE as the region’s leading private capital markets, supported by economic transformation programs, expanding infrastructure investment and growing institutional sophistication, with centers such as Kuwait also increasing activity.
The findings also highlight the growing importance of infrastructure and digital infrastructure investment. Regional investors cite opportunities across energy, utilities, transport, data centers and artificial intelligence-related infrastructure as key drivers of future growth.
Family offices are also playing an increasingly important role in the region’s investment ecosystem. The report finds family offices now account for nearly half of active private capital investors in the Middle East, with private equity representing their largest area of investment interest.
Family offices lead private capital activity as VC holds firm
The report also reveals that family offices remain the largest investor group in the Middle East’s private capital markets, accounting for nearly half of active region-based private capital investors in 2026.
Among GCC family offices, private equity represents the largest share of future search mandates at 27%, followed by real estate at 19%, private credit at 16%, infrastructure at 14%, hedge funds at 13% and natural resources at 11%.
Meanwhile, venture capital has remained resilient, with aggregate Middle East VC deal value averaging $2.4 billion annually between 2021 and 2025, even as the U.S. and Europe faced a more challenging funding environment.
Buy-and-build strategies are also gaining traction, with add-on transactions increasing from 20% of total buyout deal activity in 2020 to 46% in 2025.
