Blackstone committed more capital to the Gulf over the past 12 months than at any point in its history, with the world’s largest alternative asset manager expecting further investment growth despite the ongoing Iran war.
Steve Schwarzman, chairman, chief executive and co-founder of Blackstone, said the firm intends to increase the Gulf’s share of assets under management within its Europe, Middle East and Africa portfolio by the end of the decade.
“I would say it would surprise me if it weren’t three to four times larger from the current level,” Schwarzman told The National, without disclosing the current dollar value.
The $1.3T investment firm’s ambitions reflect a shift in the Gulf’s position within global capital markets, as regional economies move from financing international investment towards attracting capital for their own infrastructure, technology and economic diversification programmes.
Blackstone steps up Gulf investment
Blackstone has accelerated its regional investment activity over the past year, building on more than 15 years of operations in the Gulf.
In July, the firm joined global investors in a $16B investment in Kuwait Oil Company’s crude oil pipeline network. In March, it announced a $250M allocation to Abu Dhabi’s Advanced Digital Gaming Technology.
In April, Blackstone partnered with Dubai Aerospace Enterprise on an aircraft-leasing venture expected to invest approximately $1.6B annually.
The transactions span energy, technology and aviation, reflecting the range of assets attracting institutional capital across the region.
Blackstone’s regional activity also includes Glide, a $5B logistics platform established in October 2025 with Abu Dhabi-based Lunate. A month earlier, the firm participated in a $525M financing round for UAE property portal Property Finder.
The expansion comes as global investment firms increasingly compete for opportunities in Gulf markets, where sovereign-backed development programmes and rising infrastructure requirements are creating demand for external capital and specialist investment expertise.
Gulf economies become a destination for capital
Historically, international investment firms have focused on raising capital from Gulf sovereign wealth funds and other regional investors. Schwarzman said that relationship is changing as the region’s own financing requirements expand.
“That has to do with the maturity of the region and people look at it and say, ‘there’s something going on here’ [and] that is changing the way we’re looking at this region,” Schwarzman said.
Blackstone has also expanded its exposure to the Gulf’s digital infrastructure sector. Its portfolio company AirTrunk agreed a $3B data centre deal with Saudi Arabia’s Humain, which Schwarzman described as the first of potentially further transactions in the region, including the UAE.
Blackstone manages more than $200B in data centres and AI-related infrastructure globally, positioning the firm to pursue opportunities linked to the Gulf’s ambitions in artificial intelligence and digital capacity.
Schwarzman highlighted Abu Dhabi’s progress in AI development, alongside the potential advantages of its nuclear power capacity.
“There are opportunities to collaborate with what’s going on in Abu Dhabi, which in AI, is the most progressive, most informed, most advanced,” he said.
“It also has the advantage of nuclear power and it’s pretty remarkable all the things that are being done in Abu Dhabi.
He added that the scale of economic transformation underway across the Gulf was becoming increasingly apparent to international investors.
Regional expansion gathers pace
Blackstone established its first Abu Dhabi office in 2010 and has since expanded its regional footprint. The firm has broadened the scope of its Abu Dhabi licence, opened an office in Kuwait and is preparing to launch dedicated private wealth operations in Dubai.
“We’re going to have offices, in pretty much every country,” Schwarzman said.
“We expect to be over time putting more capital in the region from a global perspective, because you tend to make more money in our lines of business, where there’s rapid economic growth.”
The strategy reflects Blackstone’s longer-term view of the Gulf’s growth prospects, despite the near-term economic disruption caused by the Iran conflict.
“It obviously changes the risk profile of the region, but we’re longer-term investors, and I think the people who deal with the region, who provide capital, realise that there are very smart people running these countries,” Schwarzman said.
Infrastructure security
Schwarzman expects governments across the Gulf to increase spending on infrastructure protection and reconstruction once the conflict ends, potentially supporting a substantial new construction cycle.
“From talking with the heads of these countries, it’s pretty clear they’re going to spend whatever it takes to create a much safer environment, for their long-term economic plans,” he said.
“The commitment to engineering safety and to protect their infrastructure over the next two to three years is going to be a very intense period, and so in that sense, they’ll rebuild their economies.”
Blackstone anticipates a “very substantial construction boom” as governments seek to strengthen critical assets and reduce their exposure to future disruption.
The scale and duration of the investment cycle will depend partly on how regional security risks evolve. Schwarzman said Gulf economies would need to adapt if Iran remained “a structural problem” over the longer term.
Growth outlook hinges on conflict resolution
The International Monetary Fund estimates that the Gulf economy will contract by 4.8% in fy26 before rebounding by 9.1% in FY27 according to the figures cited in the report.
Schwarzman said Blackstone expected the current disruption to be temporary, with regional growth accelerating once the conflict is resolved.
“But what’s interesting, beyond that, is that it is temporary and we expect all of the Gulf to go into rapid growth mode once this conflict is resolved,” he said.
HSBC estimates
The infrastructure investment outlook extends beyond immediate reconstruction requirements. HSBC estimates that the wider Middle East and North Africa region requires approximately $900B in infrastructure financing.
The UAE alone accounts for more than $190B of HSBC’s estimated financing pipeline for the UAE, Middle East, Türkiye and Africa (MENAT) region: representing about 22% of the total.
HSBC’s report, released last week, identified $872B in individual project packages within a broader $1.4T pipeline of planned and unawarded infrastructure projects.
The scale of the pipeline highlights the potential demand for private capital as Gulf governments pursue economic diversification, strengthen strategic infrastructure and expand digital capacity.
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