Gulf mega deals sustain private capital momentum

Two transactions worth about $18 billion have reinforced private investors’ appetite for Gulf assets despite geopolitical disruption, tighter credit conditions and growing scrutiny of regional risk.

The deals combine a $16 billion partnership involving Kuwait’s crude oil pipeline network and the roughly $2 billion first close of a Saudi-focused private equity fund backed by the Public Investment Fund. Together, they illustrate how infrastructure and sovereign-linked investment platforms are drawing long-term capital while conventional fundraising channels face pressure.

Kuwait Oil Company agreed the pipeline transaction with a consortium comprising Blackstone, Brookfield and KKR. The structure covers about 320 kilometres of domestic and export pipelines and represents the largest foreign direct investment transaction announced by Kuwait.

The investors will acquire a 49 per cent interest in a newly created venture, while Kuwait Oil Company will retain the controlling 51 per cent stake. The arrangement is structured around the leasing of pipeline usage rights, allowing the state producer to continue operating the system while paying tariffs linked to volumes transported through the network.

Such transactions provide oil producers with substantial upfront proceeds without surrendering operational control of strategic assets. For investors, pipeline networks can offer predictable, long-duration returns supported by essential infrastructure and contractual protections.

The Kuwait agreement follows earlier transactions involving Saudi Aramco and Abu Dhabi National Oil Company. Saudi Aramco completed a $12.4 billion pipeline deal in 2021, while an Abu Dhabi pipeline partnership involving BlackRock and KKR was valued at $4 billion in 2019.

Kuwait plans to use investment proceeds to support capital expenditure and raise sustainable crude production capacity to four million barrels per day by 2035. Its oil sector is expected to require annual domestic upstream investment of about $9 billion to $10 billion over the coming years.

However, the Kuwait transaction carries greater geopolitical exposure than comparable deals completed before the current Iran-US conflict. Kuwait relies heavily on export routes through the Strait of Hormuz and has faced disruption to energy infrastructure and production.

Pipeline investments commonly include minimum-volume commitments that guarantee investors a baseline level of tariff income even when physical throughput falls. The commercial terms of the Kuwait agreement, including tariff rates and any minimum-volume protection, have not been disclosed.

The second major capital commitment centres on Brookfield Middle East Partners, which achieved a first close of approximately $2 billion on July 27. The fund is anchored by the Public Investment Fund and other global and regional institutions.

Brookfield has committed $500 million to the vehicle. Around half of the fund’s capital is expected to be invested in Saudi Arabia, with the balance directed towards opportunities elsewhere in the Middle East.

The fund will pursue buyouts, minority growth investments and other private equity transactions across financial services, business services, consumer industries, technology, healthcare and industrial businesses. Its investment mandate reflects growing demand for regional companies capable of expanding beyond domestic markets.

Brookfield has operated in the Middle East for almost three decades and has invested directly in the region since 2015. It manages more than $16 billion of regional assets across infrastructure, property and private equity.

The fund’s launch also signals a gradual shift in the Gulf private capital market. Sovereign institutions have traditionally invested large sums overseas or supported individual transactions through direct partnerships. Dedicated regional funds now offer a wider pool of institutional investors access to Gulf businesses while creating a more permanent source of acquisition and growth capital.

Private equity investment value in Saudi Arabia during the first half of 2026 was almost double the total capital deployed in 2025. Much of that growth came from large single-asset transactions, although managers are increasingly raising blind-pool funds that can invest across several companies and sectors.

Smaller growth-capital programmes are developing alongside the mega transactions. Jada Fund of Funds Company, a Public Investment Fund subsidiary, has committed capital to the $200 million Growth Catalyst Fund I, which will finance established small and medium-sized businesses seeking expansion, stronger governance and eventual exits.

The UAE remains the region’s main base for international private capital firms, supported by the Abu Dhabi Global Market and Dubai International Financial Centre. Blackstone’s $250 million investment in Abu Dhabi-based Advanced Digital Gaming Technology has added to evidence of continuing inbound interest in payments, data intelligence and digital infrastructure.