When Iran launched a missile barrage at an American air base in Qatar this summer, it was one of the most direct attacks on US assets in the Middle East in years. Yet just hours after the projectiles were shot down in the night sky over Doha, it was business as usual in the country’s capital and financial hub. In neighboring Abu Dhabi, investments proceeded on track, and bankers in Dubai expressed confidence that the United Arab Emirates would sidestep any major fallout. In the weeks after the attack, Bloomberg News reported that American companies including BlackRock Inc. and Elon Musk’s xAI were discussing deals in Saudi Arabia.
It will apparently take more than a few ballistic missiles to shake the business community’s confidence in the Middle East. With its low-tax regimes and growing pool of sovereign and family wealth—which now tops $5 trillion—the region has weathered all kinds of instability. Even as conflict in the area has greatly intensified since 2023, investors there are signaling that the Middle East is still open for business, and global companies are eager to accept their money.
Last year, BlackRock landed a $5 billion investment pledge from Riyadh. Months later a group led by Brookfield Asset Management Ltd. invested in Dubai-based Gems Education, one of the world’s largest private education providers, betting on a sector that’s benefited from an influx of expats; Bloomberg News previously estimated the deal at about $2 billion. Financial firms have continued to expand in the region too. KKR & Co. recently appointed retired US Army General David Petraeus as chairman of its Middle East franchise and is setting up a local investment team.
The Middle East, according to the BlackRock Investment Institute, finds itself at the intersection of three “mega forces” affecting investing now: geopolitical fragmentation, the energy transition and artificial intelligence. The region’s combination of reliable energy resources and oil-financed scale—along with a track record of success—could keep driving capital returns, says Ben Powell, BlackRock’s chief investment strategist for the Asia-Pacific and Middle East. “We are back to feeling quite constructive,” he says, “while of course being appropriately nervous and watchful around the geopolitical risk, which is ongoing, real and unpredictable.”
Some even see opportunity in the heightened turbulence. Ken Moelis, a veteran Wall Street dealmaker with close ties to the Middle East, says hostilities between Iran and the US could serve as a prelude to negotiations and eventually a productive relationship. While such a scenario doesn’t look particularly likely at the moment, a new nuclear agreement and the lifting of sanctions would unlock Iranian oil reserves for export and supercharge the country’s labor force. “All I hear about is what if the peace doesn’t hold,” Moelis said in an interview on Bloomberg Television in late June. “I haven’t heard one person say, ‘What if the 90 million population of highly educated, motivated Iranians come into the market?’”
Foreign investors have long held out hope for peace in the Middle East, but it’s never been a precondition for doing business there. In the past decade, Yemen’s Houthi fighters have peppered Saudi Arabia with missiles and drones, including a 2019 strike on a major oil facility that rattled global oil markets. Three years ago the Iran-backed group launched drone strikes that caused explosions and a deadly fire outside Abu Dhabi.
Meanwhile multinational companies, Wall Street banks, hedge funds and the world’s wealthy have forged new deals in the Middle East, a trend that’s only accelerated in the two years since regional conflict intensified with Israel’s war in Gaza. Unrest elsewhere in the world has even benefited the Persian Gulf: After the invasion of Ukraine in 2022, wealthy Russians bought up real estate in Dubai, seeking to diversify their rubles and serving as a fillip to property prices that were already shooting up after the Covid-19 pandemic.
“Despite recent tensions, business in the Middle East remains robust,” says Pamela Thomson-Hall, chief executive officer for international business at insurance broker and advisory firm WTW. “We continue investing significantly in the region, opening new insurance and reinsurance businesses, as we did recently in Saudi Arabia. The UAE remains central to our global growth ambition.”
Data reveal the scale of the influx. Dubai’s financial district reported a record 32% increase in company registrations in the first half of the year, helped in part by a continuing rush of hedge funds. The main island of Abu Dhabi’s financial center employs around 29,000 people, many of whom work for the 144 fund and asset management firms based there. Riyadh has seen a series of big names including Goldman Sachs Group Inc. acquire licenses for regional headquarters, while officials in Doha are dangling perks to Wall Street firms as they seek to build the city into the next great Middle Eastern financial center.
In the days before Israel and the US opened fire on Iran, Blackstone Inc. CEO Stephen Schwarzman spoke of the opportunity in the Middle East. The firm—now the world’s largest alternative asset manager, with more than $1 trillion in assets under management—views the Gulf as an investment destination rather than simply a place to raise vast sums of capital. Although local businesses have traditionally dominated the region, the rapid growth of cities across the Gulf as international centers is making it an attractive opportunity, Schwarzman said in an interview on Bloomberg Television.
This hasn’t exactly made the Middle East the next Silicon Valley. Many global businesses still look at the region mainly as a source of investment capital. The many private equity firms setting up shop there are primarily looking to raise capital rather than seek local acquisitions.
Still, countries like the UAE and Qatar view the arrangement as a good deal for them too. They’re earning billions of dollars more from oil than they can spend at home and need to find places to put the money. Along the way they’re hoping these bets help give them a piece of AI, finance or another industry that could outlast the market for fossil fuels.
Even Saudi Arabia, where finances are more constrained, remains one of the most active markets for initial public offerings and among the biggest issuers of sovereign bonds in emerging markets, showing broad international support for its economy. The kingdom’s diversification plans will continue to require partnerships with an array of asset managers and real estate developers, and it’s likely to continue doing cross-border deals that fit its goals for the local economy.
“If I look at the progression of the region over the past couple of decades, the simple way of saying it is that it’s come of age,” says May Nasrallah, a former Morgan Stanley executive who founded the Dubai-based advisory firm deNovo Partners, which PJT Partners acquired last year.
Although each new conflict brings a frisson of uncertainty, resilience has become the norm. “It is striking that this has been viewed by investors with a certain resolute optimism,” Dominic Raab, former deputy prime minister of the UK and current head of global affairs at Appian Capital Advisory, notes of this most recent flareup, “especially in the context of the longer-term big picture in the region.”
