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Laclaw and this week we're recording the show from the fifth edition of the Qatari Economic Forum in Doa. So it only seems appropriate to zero in on this massive wave of deal making emerging from the Middle East. Now, following President Trump's recent high profile visit to the region, the White House claims that Saudi Arabia, CATTER and the United Arab Emirates have made over trillion dollars in new economic commitments.
Now.
These deals, of course, span a range of key sectors, defense, aviation, artificial intelligence, really signaling this major push towards strategic partnerships and long term diversification. Now, in this episode will take the pulse of the forum. You can see it's very noisy as people also talk around me. We explore how business leaders are reacting to the latest deals and what
it could mean for the region's investment landscape going forward. Well, to unpack all of this, and there's a lot to unpack. I'm delighted to be joined by Matthew Martin, Bloomberg's chief correspond for MINA Sovereign Wealth Funds and Nationnaire Bloomberg's chief correspondent for Global Deals.
Welcome to the City of London, the city of the City of London. Please mind the gap between the tree and the financial hearts of the country, the city, the city. Welcome in the city.
Bend care of the doors. So good to have you on the podcast. We can hear each other. But the buzz is incredible actually here at the Catar Economic Forum.
Yes, itcuse and it's great to see so many people lining up and do this and more than two thousand, fiveundred delegates. It's a lot of excitement, a lot of vibe in the region, which is what you kind of see whenever you come to the Middle East and know in the last few years that's been the big change.
Yeah, but then with President Trump noither actually showing up last week, I mean it's incredible people talk about deals, right, Is this real money?
Is this real deals?
Or is this you know more terms of understanding? Is like, yeah, we'll work on it, We'll work on AI. Or is this region going to get a lot of flows quite quickly?
Well, I think I was at the Trump's visit to read last week, and there was a whole host of numbers that were being thrown out by people. You know, Initially they said that there was six hundred billion dollars of investments. Then there was announce from the stage there was three hundred billion dollars. Then the Crown Prince and President Trump as well said that there was a plan to get to a trillion dollars.
So you know where this number actually is going to end up. I think it's going to be anyone's guests over the next few years.
But I think what's what's what's clear is there is this very real change in mood between the region and the US. Relations under the Biden administration were strained at times. The region was sort of flirting with China and boosting trade and investment flows with China. Now I think that, you know, following Trump's visit, it's really sort of said that, you know, this money, they want it to be flowing
into the US. They really value that partnership, and particularly around those things you mentioned, like diversifying the economy, going into technology, and to defence. All these areas are definitely going to be sucking up a huge amount of capital out of this region.
And I mean they all lead money, right, So it's basically, you know, the GCC countries cat are saying, we have money, but we'd probably like it to be more invested in the region rather than going abroad. But the US also trying to attract funds. So it's like they're they're you know, friendly but competing.
Yes, it is, and it's actually quite an exciting, you know, interesting mix of the needs of different countries. If you look at Saudi Abia for instance, they need a lot of capital in the country. They're going through a big interest such as spending boom, they're creating the city as we know from scratch, so there's a lot of money
required in the country itself. So this the number which has been put out, has raised some question marks on whether where is that money going to come from because you're spending so much in your domestic economy.
I think Cutter and UA are a bit different.
If you look at UA for instance, you know the infrastructures already in place and their big ambition is to diversify the economy and so they have a huge requirement you know, to get access into chips and also like build out their artificial intelligence industry in Cutter even it's kind of remains similar. They're going to get huge inflows in the next couple of years, you know, from the LNG at sports and it's a small country, so why do you deploy that? And US becomes a natural home
for them. So I think the dynamics are a bit mixed for different countries here.
I'm actually I've.
Been thinking about Salt because it feels like, you know, you have president of the United States that wants to do deals, so this is not only about money. This is almost like a strategic geopolitical alliance. So how much were the deals announced in the region last week about keeping President Trump on side and how much of it is actually just pop point in cabro and putting it to work.
You know, there's clearly a very real part of this.
And the sort of announcement inflation that you saw of each of the countries that he visited around the region wanting to one up the previous one and announce more and more. Yeah, I think a lot of that is about, you know, understanding a very transactional US administration and knowing that they can they can play that game to their advantage because they often have these big sobign mode funds that can deploy capital and can make these big long
term commitments. So look, some of that is going to be a bit nebulous and is possibly not going to see the light of day. But you know, I think as well, they see that diversifying their economies. They see that building an AI industry, becoming hobs for these sorts of things, you have to partner with the US for it.
And as much as there has been all the noise around sort of deep seek and how much that sort of changes the equation around AI investments, ultimately I think everybody sees the future of AI has come out of the US, and so that's where they want to build
those partnerships. And also, you know, linking into that, the region has been very keen on getting defense agreements and security pats with the US, and so buying a lot of American hardware helps knit them into that American defense complex to set the ground for trying to do those broader geopolitical deals over the course of this administration, which I think is going to be one of the big goals.
But also if you look at some of the biggest sovereign wealth funds in the world. They sit in this region, and this is because of the revenue from more oil and gas, which will probably only increase. We heard also here from Katar that will increase. We spoke to the Kuwaiti Southern Wealth Fund. How much more money will they have to put to work in the coming years thanks to revenue?
Yeah, I think and as Danish was hinting at this a bit earlier on, you know, and we had a story the other week that Saudi Arabia has got about two trillion dollars worth of domestic commitments that it's on the hook for make and space.
Some of that out maybe, but clearly.
The big push within Saudi Arabia is gonna be domestic investments, and so the amount of capital that can go outside of the country is going to be more limited compared to a place like Doha where we are, where they've got these big gas fields coming on stream in the sort of year or two ahead. That's going to be giving the Qia this massive new war chest that they're
going to have to deploy. And you know, they're talking about a five hundred billion dollar commitment into the US over the course of the next five years or so. And that's I mean that probably has some sense of reality to it. You know, they are going to be having to digest more and more capital coming into the fond and the US is going to be a great place to try and digest some of that.
Similarly in Kuwait as well.
You know, we had the head of the Kia on the stage earlier on today.
You know, he was talking.
He was less effusive about making big commitments and pledges to the US, but you know he was clearly saying that you are underweight the US at your peril, and so you know this is a sign that you So I think both of these funds.
And also Abbadabi as well, are going to.
Be continuing to look to put lots and lots of money at work into the US.
Yeah, how do they put that capital actually to work? And again in the US.
Given the volatility that we've seen, you know, and the valuations that have been frankly all over the place, like what is our natural home for this capital to end up in the US.
So I think a lot of them actually put money into public equities and I would think that will continue. So if you think about cutoff, for instance, saying find it billion dollars of commitments over the next ten years. That's fifty billion on average every year. And if you buy the SNP some of the biggest companies that you can deploy quite a billion a few billion dollars into that.
That will continue, But I think.
They're also looking at into the AI infrastructure space. A lot of them are interested in healthcare, so that's a big sector that they're focused on. Is to understand, you know, and develop their own industry back home. You know, you need to kind of invest in that sector. So it's quite a lot of money going to that. Power is a big space because it's obviously powering. You know, you need electricity to and me the AI demand. So there's
quite a few areas that would invest in. But if you think about someone like a Qia of for instance, a Abadla, you'll see potentially it's been a bit more direct investments, which they've not been doing in the past, so that thing, I think that that would go up a little bit. And then you know the normal cost of business investing in the treasuries and public equities that which they've been doing for a few years. That will
continue as well, but still a big number. I think for me, what is kind of interesting is that if they're all chasing the same assets from the same region, trying to kind of lobby the same person in the administration, do they end up paying a little bit more like, you know, is we're going to be competition from this region for the same assets. You know, that's something which will be interesting to watch in the coming years.
I mean, it's interesting because there's also a new head of the QIA that's much more familiar actually with US, thankulity. So I wonder whether that changes the investment profile of the cybern Mouth Fund.
Yeah, I think you're clearly from the comments about the commitments that they're willing to make into the US and a lot of the talk around the event today has been very uh, there's been a very America first agenda, I think among a lot of the panelists, and I think, you know, if you look at the QIA, they're clearly buying into a lot of that trumpanomics, looking at investing not just into some of these things that the sort of the the stuff we've talked about around AI and
those sorts of technology and the sort of you know, the future industries, they're also talking about investing into the reindustrialization of the US, which is you know that that whole Trump goal of bringing manufacturing and bringing those jobs back into the US and bringing the supply chain for American goods back into America, so that they sound very optimistic about wanting to play that trade as well, which you know is something that people have had some concerns
about how how realistic that might be. But yeah, I think you know, the fact that the head of the QIA now had spent years and years running the US means he's obviously very familiar with the economy, very familiar with the investment scene there and all the people that he needs to be in contact with. And so I think, you know, that's why they're making this decision that they are going to be They're going to be very very supportive of the Trump administration's goals over these four years.
Danish, how do you see.
This ending up again if you will get equity? I mean there's a lot of talk about private credit, private equity is there already?
It's early days again.
Trump just left the region like four days ago, but is there an indication of them going more into alternatives?
There's clearly a push for alternatives though some people especially they had the the QIICO who kind of mentioned that private credit seems a little bit crowded now, but clearly
there's a lot of push towards private equity. So that traditionally how these funds have invested in private equity was either through investing in the funds itself or partnering with some of the large private equity films so looking to commit capital into buying business in the US, and they would come in as a minority investor, and that they've been doing for a while. Because they're also like the biggest l priests to some of these funds, they've always
got like a bit of proferential access. They get co investment opportunities, they're the first ones to see these deals. And in a world where there's not so much money floating around the Middle East as an LP base over the years has become very important for the private agreedy firms, so it's not a market they can ignore. That's why we're seeing a lot of private EGREDI firms announcing that they're setting up shop in Abu Dhabi or in Kata
or in Rear. That's because they understand that the money for some of those big investments they need the equity check is coming from this region, so I think that would continue to improve.
The only few of them.
I don't think a lot of them are keen on buying majority stakes and owning businesses outright because they just don't have the manpower and the operational capabilities to run businesses per se. But they do get twenty persons take and a big business and they get a saying that they get a board seed. That's how I think the alternative push is going to go into it. Plus there's also like you know, if you look at someone like an idea, there is a push to do investments more into hedge funds.
You know, we keep we understand.
They're looking at a lot of company a lot of money into different strategies. So those that will continue as well.
Infrastructure, AI, Sports, I mean, I guess there's still a big posh also because of the young population here to own sports teams.
Is it football or it could also be others.
Yeah, well, I think we're going to see sports continue to be a big theme across the region. You know, I think sports has been emerging much more as a sort of investable asset class over the last few years than it has been in the past. Obviously, you know the PIF's investment and creation of Live and they sort of plan maybe if they can get dealed on to merge with the PGA. You know that that's another big push by the PIF to get into into the US
sports scene. And there's you know, sort of talk around changing some of the rules around ownership of American sports teams, which opens up the door to these.
Sort of private extuity players.
And I think, you know, one of the things that we've heard from some of the sessions today is that the sovereigns out of the region can afford to be patient, and they can afford to take some time investing in these things which maybe don't return a huge amount of money in a typical sort of three to five year private acuity period, but if you look at that longer sort of ten to fifteen years, then they could be really they could be both financially viable and they play
this great role for promoting the region and promoting the region is a place to invest, a place to holiday, a place to visit, promote that sort of understanding as well, and that those sort of soft power links which is increasingly a role that the sovereigns out of the region are playing. You know, they used to be you know, fifteen twenty years ago, the sovereign funds were all saying, look, we're not political actors, We're purely investing for financial returns.
And now, you know, I don't think anybody bothers making that argument.
I think you know it.
Clearly they are in They are playing a role in state craft and a role in soft power.
Projection, which is also why we saw a lot of the trophy assets, right the like Herod's or PSG or some of these big brands that was cool to own if you have a lot of money. So like you you're the new kid in town. It's like suddenly you have a brand that everybody recognized and either just like staying there or shopping there or watching Will that continue?
Yeah? I think so.
You know, if you look at the sort of Oscar Wild quote of you know, the only thing worse than being talked about is not being talked about.
And so you know, I think that that's part as.
Your father by Deneh, and that's part of sort of inserting themselves into the conversation and things like you know, Harods and things like.
You know, all the money that gets.
Poured into hosting sporting events in the region, it makes you part of the conversation. You know, nobody has written more about Saudi Arabia since these live golf and the investments into the Premier League get into bringing Premier League players to Saudi Arabia. So, you know, I think that that that's all part of because of elevating the the role and the knowledge that of these countries are all around the world.
Yes of sports is soft power, as Matt mentioned, and that's been a big factor for buying into some of these It's not just the financial returns, you know, see increasing that we see these funds trying to buy influence as well as you know, when they buy assets, it's also like what kind of influence that can get in
a certain administration or a certain region. So there's a bit of that thinking going behind and the fact that they can own some of these assets for longer periods of time, you know, compared with the private equity firm give some the ability to kind of withstand losses, you know, through cycles, So that kind of that that's something that one days they have, so you kind of I think
we'll continue to see sports investments. We saw a period and QI a kind of stepped away from making these you know, trophy asset investments uh and kind of went into a lot more venture capital investment in early tech investments. But we kind of think like with the more influence coming in over the less two years, so we'll kind of see bigger deals.
Uh.
And it has to be like, you know, like some of the big assets you know that turn become trophy assets to maybe continue to see that as well.
I mean, there was a wave where there was a lot more scrutiny great and that's coming gone about some of the money from certain parts of the world going for example, to London to New York.
Where are we on that?
I think there were some reports about some of these investments which was promised to the Trumpet administration and the some ipro's being raised in the US about what does this mean for some of our core assets. I'll be giving too much access to Middle East and investors, so that there will be that screwtinay doesn't go away. But I think you know, when you have an administration on your side, and when you have someone who is so transactional and who wants to kind of see investments being
made into the country. I think there is a bit of levy in that. I don't think so. During the Biden administration, Sophius was a big concern for Seals funds, like they were lobbying to try and see how can we get access to US ASS without Sephius blocking some of these deals. And overall it seems like the regulatory environment in the US is a bit more friendly now. Uh So, I guess it's less of a concern now, but these things always come and go.
Yeah, yeah, and Matthew also the way for him, I mean even Qatar, but other you know, countries in the region straddle I guess, a friendliness with the US in terms of investments, but also the China. At some point do they have to choose or are they being asked to choose between the two if there are the two biggest rivals on Earth.
Look, I think under the Biden administration, certainly the rhetoric then was that I think the region was being asked to choose, and without dangling the carrot in front of them as to why they should be choosing the US, I think there was much more openness to to engage with China. You know, China is the biggest trading partner purely because of oil and how much China is buying from this region, So you know, the Gold States have to do something with China. I think, you know, the
US would like to see that limited though. I think that, you know, the challenge is going to be after the last couple of days, we've seen these ginormous US investment pledges, and we sort of talked a bit earlier about the fact that there's a lot of skepticism about how real
some of that is. I think the question is going to be, you know, in five ten years time, how much have we seen those turn into real investments and how much do we see that Ultimately, a lot of Chinese companies have come in and swamp the market quietly, without these big headlines and without these ginormal state visits, and they just quietly come in and gobble up the market. And I think that's something that you know, we're gonna have to watch over the next few years.
Yeah, I agree with that.
I think they will choose the US and they will invest with China without making headlines. So it's kind of a way where the headline grabbing announcements won't be with Chinese companies. But if you look at this region, where does Aramco sell most of it's oil too, it's to Asia where does Cutters sell their most of the gas toots to China, So they're the biggest market.
It's very hard for them to ignore it.
And we've seen a lot of Chinese investment come into the region and they're very serious about it.
But it just won't be.
At the the you know, like the headline dabbing investments that we see to the US.
Yeah, and I understand to Maage's point, you know, but let's say even twenty or thirty percent of what was announced, you know, it becomes real money, and it's a lot, it's a lot of cash, it's a lot of like investments to be deployed.
Is that are those deals that have.
Been taken away from the UK and Europe because there's there's not an infant amount of capital, So is the money being used here you know, couldn't have been used elsewhere?
Yeah, I mean I think in a way Europe had has had in the last few years, kind of lost those investments. There is a feeling today that Europe is cheap so I would expect some money to go into the US. Was interesting, the governor of PIF made a commitment to invest more money to the.
US sorted to Europe.
Haven't seen that in a long while, but it just it would be I mean, you can also argue that there'll be money going to India, a bit going to Indonesia as well. I don't think Europe will be at the top of the of the list, so they definitely seem to be missing out on some of these opportunities.
Matthew, thank you so much for joining us. Well thanks for listening to this week's In the City from Bloomberg. This episode was hosted by me franc Laqua in Qatar, was produced by Somersadi Moses and dam and Tala Maddi. Brandan Francis Mnham is our executive producer. Special thanks to Donationchnaier and Matthew Martin. Please subscribe, rate, and review wherever you listen to podcasts.