Sovereign wealth funds focus on the home front

EVENT: A new Saudi sovereign wealth fund (SWF), Sanabil Al Saudia, started operations last week.

SIGNIFICANCE: Gulf SWFs have recently initiated major changes in their investment strategy. They have shifted away from investing in Western markets, particularly the financial sector, and started to invest in local businesses and banks. Moreover, they have decreased the dollar ratio in their investment portfolio and started to be more transparent as a response to the global anxiety over their investment goals.

Arab SWFs have retreated somewhat from global markets as the value of their investments has fallen and have focused more on domestic economies.