Dubai: Invesco compared the results of the Middle East study with research on global sovereign funds and found a marked difference in the behaviour of sovereign wealth funds in different parts of the world. Whereas Asian sovereign funds tended to be focused almost exclusively on returns, most of the Middle East funds had explicit or implicit development goals, such as supporting the domestic private sector or building skills in the job market.
The study also found that Middle East sovereign funds were able to pay their staff more than funds in other parts of the world. Thirty-eight per cent of Middle East funds said they were able to match private sector salaries compared to just 15 per cent of global sovereigns.
Middle East development sovereigns are more focused on skills and more willing to invest internationally than the global average. Development sovereigns are a small but growing percentage of Middle East sovereign assets. Middle East development sovereigns are learning quickly, with growing transactional experience and significant investment in process and governance since 2012. In contrast to most international development sovereigns, some of the Middle East sovereigns have recently expanded their mandates to include international investments. The potential drivers of mandate change include excess capital relative to local opportunities and a focus on acquiring skills. There is a stronger emphasis on skills to diversify the economy relative to employment or short-term GDP especially within the smaller, more wealthy, Gulf States.
