Private Market Allocations In The Middle East: Accessing Opportunity Amid Complexity

As the Middle East navigates a shifting economic landscape marked by fluctuating oil prices and growing budgetary pressures, asset owners are reevaluating traditional investment approaches. In pursuit of long-term, diversified returns, the region’s asset owner community have increased their allocations to private market investments—private equity, private credit, real estate, and hedge funds—as a strategic pivot away from conventional asset classes. According to Northern Trust’s Asset Owners in Focus study, released in April 2025, 90% of Middle East asset owners now invest in private markets.

This transition, however, is not without its challenges. Private markets bring new layers of complexity in portfolio construction, liquidity management, and operational servicing. From data fragmentation to evolving risk profiles, asset owners must rethink how they build and support resilient investment models.

Throughout this article, we explore the macroeconomic forces driving the rise of private markets in the Middle East, the asset classes gaining traction, and the operational considerations that will define success in this evolving landscape.

The macroeconomic backdrop

The Middle East’s increasing allocation to private markets is rooted in a mix of oil market pressure, economic diversification, and an evolving asset owner landscape.

Oil price volatility

Historically reliant on oil revenues, many Middle Eastern economies—especially in the Gulf Cooperation Council (GCC)—have faced budgetary strain due to fluctuating oil prices. Price swings, driven by geopolitical tensions and global supply-demand shifts, have made long-term fiscal planning more difficult. This has pushed sovereign wealth funds, family offices, and other asset owners to seek more stable and diversified sources of return.

Growth of sovereign wealth funds

Middle Eastern SWFs have grown significantly in size and sophistication, now boasting MENA sovereign wealth fund assets projected to reach $8.8 trillion by 2030. As a result, they are increasingly deploying capital into private equity, private credit, and infrastructure, often as lead investors or co-investors with global firms.

Economic diversification agendas

Countries like Saudi Arabia and the UAE are actively pursuing economic transformation strategies (e.g., Vision 2030), which aim to reduce dependence on hydrocarbons. These national plans prioritize investment in infrastructure, technology, healthcare, and renewable energy—sectors often accessed through private markets.

The rise of private markets in the Middle East

Over the last several years, Middle East investment into the private markets sector has significantly picked up, to the point that the region serves as a major player funding private market investments across industries and across the globe. According to one report, the Middle East’s private equity market is projected to grow from $45.61 billion in 2025 to $75.51 billion in 2030.

Further to Middle East private markets growth, Northern Trust’s study found the region’s average asset owner allocation to private markets is 20.7%. This is significantly higher than many of the other highly developed asset owner markets surveyed, including the U.S. (10.3%), Canada (13.1%), and the U.K. (11.3%).

Middle East asset owners invest heavily across multiple private market asset classes, but real estate is particularly important to these allocators due to the region’s ambitious economic development goals. According to the study:

• 80% invest in real estate
• 78% invest in private equity
• 56% invest in energy and natural resources

However, private debt may be an untapped opportunity for the region, with only 22% participating in direct lending. Other forms of private debt see more engagement, including senior direct private debt (56% partaking) and distressed funds/special situations (44% partaking).

Compared to the U.S. and Europe, the Middle East’s private debt market is more nascent. Legal frameworks, bankruptcy laws, and investor protections have only recently begun to evolve to support more sophisticated private credit structures.

There is a need for more local investment opportunity in addition to the safety of assets, transparency, and a recognized legal framework. For this reason, investment allocations are often concentrated more heavily in structures outside the GCC. However, this is changing, and more choices are becoming available.

Operational challenges and servicing opportunities

Despite the exciting growth in private market allocations across the Middle East, asset owners continue to encounter operational challenges that come with managing these complex investments. As allocations increase, so do the demands on operational infrastructure, data management, and servicing capabilities.

Complexity of private markets

With private markets existing as a highly manual asset class, middle and back-office servicing of these investments quickly becomes time-consuming and complex. Middle East asset owners feel the strain on their operations teams, according to our findings:

• 50% said access to timely, accurate portfolio data was a top three internal challenge.
• 40% said that finding efficiencies to highly manual operations was a top three internal challenge.

Furthermore, asset owners experience challenges in integrating that complex private markets data in with their public portfolio data to access a total portfolio view. Achieving this full view is essential for a true understanding of portfolio analytics and total exposures across asset classes, industries, geographies, and beyond.

Outsourcing vs. Insourcing

As private markets allocations grow and asset owners continue refining how they manage the complex operations behind these investments, many reach a point where they must evaluate whether to invest in the necessary staff and infrastructure to manage these challenges or to outsource to a service provider.

Data collection from general partners (GPs), validating, reconciling, analysing portfolio company data, and calculating adjusted valuations is a very manual, time-consuming process for asset owners. By outsourcing these tasks, asset owners can achieve efficiency and scalability. Particularly when it comes to data challenges, the vast majority of respondents lean toward working with a service provider—80% of study respondents said service provider help would be valuable when it comes to both investment analytics support and data reporting solutions.

Liquidity management

Unpredictable capital calls and long lock-up times inherent in private markets mean that asset owners face challenges in managing liquidity and cashflow as their allocations tick up. Our study found that liquidity has become more important to 70% of Middle East asset owners over the last year. As a result of liquidity becoming more important, 71% have increased their cash allocations.

As cashflow becomes more crucial with higher private markets allocations, asset owners need access to tools that help them understand their liquidity and make timely investment decisions based on that insight. It’s important that asset owners know all their banking product options for keeping reliable access to necessary liquidity, ensuring they avoid any cash drag.

Northern Trust’s commitment to solving for private markets challenges

Northern Trust offers a suite of asset servicing solutions tailored to help Middle East asset owners navigate the operational complexities of private market investments, including:

• Alternative asset servicing
• Data aggregation and portfolio analytics via Northern Trust Front Office Solutions
• Regulatory and compliance support
• Liquidity and risk management tools

These capabilities are designed to help asset owners manage the resource-intensive requirements of servicing complex private investments across the investment lifecycle.

As Middle East asset owners continue to expand their allocations to private markets, the region is emerging as a global force in private capital investing. Yet with this growth comes a new set of operational demands—from managing liquidity and data fragmentation to navigating evolving legal frameworks and servicing complexities.

Success in this landscape will depend not only on strategic asset selection but also on the ability to build resilient infrastructure and partnerships that can support the intricacies of private market investing. As the market matures, asset owners must assess their readiness and explore how specialized partners like Northern Trust can help them scale with confidence.