BlackRock says Middle East is a 'two-way street' for global capital as deals rise

The Middle East has evolved into a two-way portal of global capital flows and the $13.46 trillion asset manager BlackRock is rapidly expanding in the region to grab a larger share of investment deals, its vice chairman has said.

The region is no longer just an exporter of capital, “which is why we're building out capabilities, we're building out investment teams, we're building out offices and people on the ground and it's a perfectly natural evolution”, Philipp Hildebrand told The National in an interview at Abu Dhabi Finance Week.

“Basically, every fund in Europe and America that came [here] to try to get money, the whole concept is now reversing itself, or rather evolving towards a two-way street.”

“How can we invest in the region, as opposed to just getting capital to invest outside”, is the question firms are now asking, Mr Hildebrand said.

The evolution of the Middle East as an investment destination is only “part of the success story”, he added. The other part, on which BlackRock is focused, is the mega trend of capital market's role in transition, which Mr Hildebrand calls “the future of finance”.

The diversification and deepening of capital markets, broadening investor base, and creation of new sources of funding are essential pieces of a future-proof economy, “so this reversal, or this two-way flow of capital, makes perfect sense, and I think it's essential for the region”, Mr Hildebrand said.

Primed for investments

Beyond the capital markets, the region, especially its two largest economies, Saudi Arabia and the UAE, are primed for investments in hard infrastructure as well as technology, artificial intelligence and data centres, Mr Hilderbrand said.

“It's both a traditional infrastructure story … that's really a global theme, and then there's the specific infrastructure to the AI theme, which is mostly around power, ideally renewable, and data centres,” he said.

“I think this is where Abu Dhabi is perfectly positioned. You can see that to be a clear priority, both here, but also in [Saudi Arabia].”

The flow of private credit is critical for the broader region because the scale of investment into AI will require a lot of private capital, he said.

BlackRock is among a rapidly expanding group of asset managers, insurers, financial institutions and investment houses that have either set up base in the region or are looking to consolidate their presence in the Gulf.

Phillip Hilderbrand, vice chairman of BlackRock, says regional investment opportunities exist in traditional and future sectors. Photo: BlackRock

In recent years, Abu Dhabi's financial centre in particular has attracted investors, trillion-dollar asset managers, global hedge funds and wealth advisers.

A presence in the UAE provides global financial heavyweights with an opportunity to expand in the broader Middle East and work closely with some of the world's bigg