Outsize deal drives Middle Eastern sovereign wealth fund coinvestment surge

The joint investments of Middle East-based sovereign wealth funds and private equity firms reached $39.36 billion for the year through July 15. The figure is on track to exceed the $45.12 billion reported in full year 2024, according to S&P Global Market Intelligence data.

Driving the total is an outsize deal announced in June involving Abu Dhabi Developmental Holding Co. PJSC, The Carlyle Group Inc. and XRG PJSC in a proposed $23.86 billion takeover of Australian LNG producer Santos Ltd.

"Middle Eastern [sovereign wealth funds (SWFs)], which were previously seen simply as well-paying customers for private equity funds and other investments, are now playing a 'partner' role, and have established a presence that is commanding the attention of major institutional investors," according to a March report by Mitsui & Co. Ltd.

"Assets under management by SWFs in the [Middle East and North Africa] region, which is dominated by Middle Eastern countries, will grow at an average annual rate of approximately 9% during the period from 2025 to 2030," the report said.

SWFs typically seek minority stakes with minimum equity checks starting at about $300 million, often preferring investments between $500 million and $1 billion, according to a report by investment bank Harris Williams LLC. They are attracted to sectors that promise growth but tend to avoid industries with high reputational risks.

SWF involvement in overall M&A is rising, particularly as Singapore's GIC Pte. Ltd. and Temasek Holdings (Pvt.) Ltd., the United Arab Emirates' Mubadala Investment Co. PJSC, and the Qatar Investment Authority have established teams in key markets, including the US, the report said.

– Download a spreadsheet with data featured in this story. – Read up on midyear private equity exit trends. – Catch up on private equity fundraising in the first half of 2025.

Between Jan. 1 and July 15, the transaction amount was the highest in Asia-Pacific, which attracted $23.88 billion from three deals, Market Intelligence data showed. Europe was second with $12.85 billion across seven transactions.

Energy and utilities attracted the most capital among all sectors, with $23.86 billion from three deals as of July 15. The industrial sector followed, with $8.40 billion from three transactions.

Top transactions

The proposed Santos transaction, which is awaiting regulatory approvals, is the largest Middle Eastern SWF coinvestment with private equity so far in 2025.

The second-largest deal so far is the planned $7.84 billion acquisition of German energy contracting services provider Techem GmbH by an investor group including Mubadala and GIC. The two SWFs are partnering with TPG Capital LP's TPG Rise Climate LP on the deal, with Partners Group Holding AG-managed Partners Group Private Equity Ltd. reinvesting in Techem.

The year's third-largest transaction as of July 15 was the proposed $4.18 billion acquisition by Mubadala and Bain Capital Private Equity (Europe) LLP of German facility manager Apleona Group GmbH from PAI Partners SAS. Mubadala intends to acquire a minority stake in Apleona.