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The US-Israeli war against Iran threatens to disrupt global dealmaking as Gulf investors that have bankrolled transactions worth billions of dollars reassess their spending priorities.
At least $106bn worth of deals struck in North America and Europe that hinge on commitments from the Gulf are yet to be completed, according to data from PitchBook, a potential risk as the conflict with Iran drags on.
Gulf investors put money into more than $120bn of completed deals in North America and Europe last year, according to Dealogic. But they and the sovereign wealth funds they operate are now reviewing their portfolios and deployment strategies after bearing the brunt of Tehran’s military response to the conflict, analysts, officials and bankers told the FT.
Missile and drone attacks on the energy facilities and infrastructure of US allies in the Middle East have reverberated through markets and heightened economic uncertainty across the region. Qatar’s economy is forecast to shrink 8.6 per cent this year, according to the IMF, as the war disrupts its ability to produce and export gas.
Gulf nations are now “reassessing their portfolios, their future investment commitments, and current commitments to deal with the economic blowback of the war” and the turmoil it had unleashed, a Gulf official told the FT.
Six of the world’s top 10 sovereign wealth funds, including the Abu Dhabi Investment Authority, Saudi Arabia’s Public Investment Fund and the Qatar Investment Authority, are based in the Gulf, with a combined wealth of nearly $5tn that has helped finance a host of recent megadeals.
The Gulf nations accounted for nearly half of all sovereign investments globally in 2025, with $126bn deployed across sectors from AI and entertainment to financial services, according to data platform Global SWF.
The PIF last week offered a glimpse of what may lie ahead, as it outlined a new strategy planned before the Iran hostilities erupted, which will result in the $1tn fund narrowing its focus on fewer areas.
Yasir al-Rumayyan, PIF governor, said the fund would not reduce its international commitments, but conceded the Iran conflict added “more pressure to reposition some priorities”.
“It’s a dynamic [environment] with or without war,” he told Saudi news channel Al Arabiya. “But of course, the war would add more pressure to reposition some priorities.”
Two high-profile deals that depend on Gulf money are still on track. Paramount Skydance has reportedly secured Gulf backing for its roughly $110bn takeover of Warner Bros, while the Saudi-led $55bn deal for video game maker Electronic Arts is to close in the coming months.
“Capital is still there, it didn’t fly out,” said Christiane El Habre, regional director for the Middle East at financial services provider Apex Group. “I haven’t seen any kind of panic so far.”
Still, bankers said they did expect Gulf countries to at least pause some investments so they could prioritise domestic economy. Even small changes in sovereign wealth funds’ spending patterns ripple through financial markets that rely heavily on their financial firepower.
“The SWFs’ propensity and capacity to support the local economy is very high,” said a senior banker who works with them, noting how they had intervened domestically in previous crises, such as the Covid-19 pandemic.
“Issues such as rising defence spending, infrastructure resilience costs and exposure to energy disruption are likely to push governments to prioritise strategic sectors,” added Ana Nacvalovaite, a specialist in SWFs at Oxford university’s Kellogg College.
“This means less emphasis will be put on discretionary global growth assets such as venture capital, and more focused on domestic investment, defence industrial capacity, energy security and of course critical supply chains such as food security,” she continued.
The coming weeks and months will offer more clues on the extent to which Gulf funds might be playing a less prolific role in global dealmaking.
For one government adviser, that would be a sign that SWFs were fulfilling the role they were originally set up to do. “They were created for the proverbial rainy day, so the question is whether this rainy day has finally arrived,” he said.
Data visualisation by Clara Murray and Steven Bernard
