The UAE is a major player in overseas investments, whether they’re high-profile headline-making sports investments or the less glamorous but equally impressive ones. It’s estimated that when we take together the government and private sectors, UAE investments overseas will reach $2.5 trillion by the start of 2024.
At the core of these investments is a strategic ambition that’s equally focused on diplomacy and diversification. The UAE’s investments abroad are not just financial moves but genuine partnerships designed to strengthen international ties. This approach has helped position the UAE as an international player in finance, sports, infrastructure and many other areas.
From iconic football clubs to major financial institutions, the UAE’s sovereign wealth funds (SWFs) have made some bold moves abroad, particularly in Europe, but in recent years, greater attention has been paid to the US and several African countries.
Why and how the UAE invests abroad
For a long time, the GCC’s oil-based economies have been creating long-term visions to secure their countries’ wealth long into the future. While domestic investments in green technology and infrastructure have played a key role, international investments often make the most noise and have a significant cultural impact.
These investments play a central role in helping the UAE diversify away from hydrocarbons, create soft power leverage that Western nations have enjoyed for decades, and create greater visibility and prestige for the country.
SWFs are owned by the state and funded through the state’s various sources. While the largest global SWF is, in fact, Chinese, the GCC has an outsized position when it comes to the world’s top ten funds – almost 40% of wealth from global SWFs comes from the Gulf, and the UAE ranks highest within that region.
Sports and soft power
We can’t discuss UAE overseas investments without focusing on football. The trend began in 2008 when an ailing English football club was taken over by Sheikh Mansour bin Zayed Al Nahyan’s Abu Dhabi United Group. Once living in the shadow of the mighty Manchester United, Manchester City has since found its feet and become a global brand. Meanwhile, the UAE’s growing involvement in Formula 1 continues through Etihad Airways’ sponsorship of the F1 team and Abu Dhabi’s hosting of a Grand Prix.
Traditionally, the UAE has looked to European sports, particularly football and motor racing, but there is now a greater interest in the US sports arena. Abu Dhabi’s Mubadala Investment Company has expressed interest in investing in the legendary multi-championship-winning Boston Celtics and has formed partnerships aimed at developing basketball infrastructure and fan engagement globally.
There are also reports that Emirati investors are interested in acquiring stakes in NFL franchises or forming commercial partnerships with the league as part of a broader strategy to embed the UAE in elite American sports.
Finance
The UAE plays an increasingly significant role in world finance. The Abu Dhabi Investment Authority (ADIA) currently holds 4.9% of Citigroup’s share capital, while Mubadala holds 7.5% of the global investment firm Carlyle Group. Recently, First Abu Dhabi Bank attempted the acquisition of the British multinational bank Standard Chartered. While regulators blocked the move, it seemed to indicate a shift in ambition. It is increasingly possible that at some point in the near future, a UAE SWF will acquire a major global financial institution.
Trump and the new American focus
Even before Donald Trump’s second term as president started, there were significant moves from the UAE regarding investment in the US. Back in January of this year, Emirati billionaire Hussain Sajwani promised a $20 billion investment in US data centres, a move announced by Trump himself. Meanwhile, Emirates Global Aluminum plans to invest in the first new aluminium smelter in the States in 35 years, which would nearly double US domestic aluminium production.
Beyond these individual investments, the UAE has committed to a 10-year, $1.4 trillion investment framework in the US, focusing on AI infrastructure, semiconductors, energy, and American manufacturing.
This is not purely opportunistic. It’s part of a broader effort to ensure long-term security by embedding the UAE’s economic interests into key sectors of allied economies. So, investment becomes a tool of diplomacy that allows economic interdependence to be both a buffer against instability and a platform for influence.
African investments
Africa offers an ideal stage for long-term investment with its high-growth potential and abundant resources. The UAE has emerged as a leading source of new business investment in the continent. In fact, Emirati firms have announced projects worth $110 billion between 2019 and 2023 – of that figure, $72 billion was directed towards renewable energy initiatives.
The UAE’s interests extend to natural resources, with International Resource Holdings acquiring Zambia’s Mopani copper mines in 2024. Meanwhile, the UAE has signed a landmark $35 billion investment agreement with Egypt to develop the Ras Al Hekma region, marking one of the largest FDI deals in Egypt’s history.
In addition, DP World has operated in Africa for many years. The company now has a workforce of over 20,000 across the continent and runs ports and logistics hubs in nine African nations, including Algeria, Mozambique, and Nigeria.
Looking ahead
While we may well see more football teams being acquired in the future, the world’s gaze will be fixed firmly on movements across several sectors in the US and Africa. With major investments in everything from data centres to copper mines and brand-building sponsorships of major sporting events, the UAE’s SWFs look set to continue to broaden their portfolios in the future.
When put together, the country’s investments form the pillars of a broader diplomatic and economic strategy that positions the UAE as a regional power and a global partner.
So, where will we go from here? It seems that at the heart of the UAE’s overseas investments lies a clear vision – that the future is about relationships and not just about returns. This will likely guide the moves we see in the future.
