BlackRock expands Gulf bet, sees up to $100 billion staying home

Summary

• BlackRock is increasing Gulf commitments, expecting more state wealth to be invested inside the region.
• Strategist Ben Powell estimates $50-100 billion of outbound capital may stay home after the Iran war.
• The shift would redirect money toward domestic energy, infrastructure and AI build-out projects.

The latest

The world's largest asset manager is deepening its Gulf exposure on a bet that the region will keep more of its sovereign wealth at home after eight months of war with Iran. Ben Powell, chief investment strategist for the Middle East and Asia-Pacific at the BlackRock Investment Institute, told Semafor the firm remains undiminished in its focus on the region despite the unresolved conflict.

Details

• The scale: BlackRock manages more than $15 trillion in assets and already runs offices in Abu Dhabi, Dubai, Riyadh, Doha and Kuwait City, according to Semafor. The firm is stepping up commitments rather than opening a new footprint, positioning itself closer to the sovereign funds that dominate regional capital allocation.
• The estimate: Powell put the volume of capital that could stay in the Gulf instead of flowing abroad at $50 billion to $100 billion, while cautioning that the estimate carries wide error bands. He framed the shift as a change at the margin, not a reversal of the Gulf's role as a capital exporter.
• The driver: Powell tied the expected redirection to $2.1 trillion in strategic capital spending that the BlackRock Investment Institute estimates Gulf states will make through 2030 as part of their diversification push. The bigger change, he said, is a focus on "societal and economic resilience" across energy, infrastructure and AI.
• Still exporting: Powell said the Gulf will continue to be a significant exporter of capital. Data from Global SWF supports that: regional sovereign wealth funds deployed $53.9 billion across 108 transactions in the first half of 2026, an all-time high for the period.
• The infrastructure play: BlackRock's Global Infrastructure Partners is part of a $30 billion infrastructure partnership announced in May with Abu Dhabi sovereign fund L'IMAD, national oil company ADNOC and Singapore's Temasek. The vehicle gives BlackRock direct co-investment exposure alongside two of the region's largest state-backed balance sheets.
• The Abu Dhabi draw: BlackRock is among a growing number of global firms setting up in ADGM, Abu Dhabi's financial center, drawn by proximity to sovereign wealth funds including ADIA and Mubadala. Semafor reported that concentration of state capital is the central pull factor for international managers.
• Temasek's move: Singapore's Temasek will open its first Gulf offices early next year, Semafor reported, joining a lengthening list of global investors establishing a physical presence in the region rather than covering it from London, Singapore or New York.
• The AI link: OpenAI is in talks with BlackRock and UAE funds, including Abu Dhabi's MGX, to raise as much as $30 billion, Bloomberg reported. The discussions connect the asset manager's Gulf expansion directly to the region's artificial intelligence financing ambitions.
• The war backdrop: The Iran conflict is now in its eighth month with no resolution. BlackRock's thesis assumes the war itself is pushing Gulf governments toward domestic resilience spending rather than deterring them from deploying capital.

Between the lines

BlackRock's pitch rests on two figures that pull in opposite directions: record outbound sovereign deployment of $53.9 billion in six months, against Powell's estimate that $50-100 billion may stay home. Both can hold if the $2.1 trillion domestic spending program grows faster than outbound flows shrink. The firm is positioning for the domestic side of that equation.

What's next

Watch Temasek's Gulf office opening in early 2027, progress on the $30 billion ADNOC-L'IMAD infrastructure partnership, and whether the OpenAI fundraising talks with BlackRock and MGX produce a signed commitment.

Source: Semafor Gulf, Bloomberg, Global SWF