New deals for Middle East funds

BARCLAYS sees bank mergers and sovereign wealth funds’ technology investments are driving Middle East deal making this year as the region adapts to low oil prices. “The type of deals sovereign wealth funds are looking for has changed over the years, but they continue to be active,” Makram Azar, chairman for the bank in the Middle East and North Africa, said in London. Funds are looking at opportunities in new areas, such as technology, as well as traditional sectors, such as real estate and infrastructure where they can get good yields, he said. Sovereign wealth funds in Gulf Arab states are seeking new sources of income to lessen their reliance on volatile oil markets. Since last year, Saudi Arabia’s Public Investment Fund has funnelled about $50 billion of the kingdom’s reserves into investments abroad, almost all of it into technology. It is said to be committing as much as $45bn to partner with SoftBank to set up a new $100bn vehicle to invest in global technology. The fund also invested $3.5bn in Uber Technologies last June. Elsewhere, Abu Dhabi’s Mubadala Investment is considering investing $10bn to $15bn in SoftBank’s fund, people familiar with the plan said in January. Qatar Investment Authority plans to open an office in Silicon Valley to diversify its interests away from oil and gas, and the fund is still studying plans to invest in SoftBank’s fund, chief executive Sheikh Abdullah Bin Mohammed Bin Saud Al Thani said in March. Equity markets in the region, which have remained muted for the last couple of years, are showing signs of revival, Azar said. Emirates Global Aluminium, the largest aluminum producer in the Middle East, selected advisers for an initial public offering that could raise about $3bn, people familiar with the matter said in March. Saudi Arabia is aiming to sell as much as 5 percent of shares in Saudi Arabian Oil Company. – Bloomberg