Middle East institutional investors to increase allocations in private markets

US asset manager Nuveen indicates investors are looking for diversification outside of developed markets.

Middle East institutional investors are eyeing an uptick in private equity and private credit allocations, as diversification emerges as a key component in growing the private-market portfolio.

Eighty seven per cent of institutional investors in the region are invested in private markets, with 53% planning to increase private equity and private credit allocations, according to a survey by US asset manager Nuveen.

Nearly half of investors (43%) plan to increase public investment grade fixed income, while 30% plan to increase public securitised debt.

Findings also indicate investors are looking for diversification outside of developed markets. According to the survey, 37% of Middle East investors plan to increase public below investment grade fixed income allocations.

“What is particularly striking is the emphasis on diversification: investors are not just increasing allocations, they are broadening them, adding new forms of private credit, infrastructure debt and asset-backed investments to build more resilient income streams,” said Fadi Khoury, Head of Middle East at Nuveen.

Portfolio redirection

According to the survey, 70% of institutional investors in the Middle East are also increasing portfolio liquidity, the highest percentage across regions, with trade, tariff and geopolitical issues continuing on from last year.

Among the investors that reallocated capital by region, more than one-third (36%) increased exposure to Europe, reflecting a strategic shift toward diversification amid heightened uncertainty.

Artificial intelligence (AI) related technology, alternative credit and private equity, digital assets, energy and renewables, cybersecurity and healthcare are witnessing an increase in allocations.

AI, energy transition and deglobalisation have also emerged as key megatrends reshaping investment strategy in 2026

“Middle Eastern institutional investors are approaching today’s megatrends from a position of long-term confidence and strategic clarity. The region’s investors are equally focused on how AI, the energy transition and evolving global trade dynamics translate into real, investable opportunities,” Khoury said.

© ZAWYA