China and Bahrain’s Investcorp Launch $1bn Fund

China’s growing presence in the Middle East continues as the country’s sovereign wealth fund partners with Bahrain’s Investcorp to launch a $1 billion investment fund. The Investcorp Golden Horizon fund is designed to assist companies across Saudi Arabia, the broader Gulf Cooperation Council (GCC) region, and China.

The fund will be backed by reputable institutional and private investors from the GCC, along with China’s state-owned China Investment Corp (CIC). The targeted companies are expected to have high growth potential in sectors such as consumer, healthcare, logistics, and business services.

Bin Qi, Executive Vice President and Chief Information Officer at CIC, said that the investment marks another step in facilitating industrial cooperation between China and key global economies. “We are working closely with Investcorp to build a bilateral fund to strengthen financial and industrial ties between China and GCC countries,” he said.

This move by CIC is part of a larger trend of growing economic ties between China and the GCC, which is fueled by the GCC’s stable regulatory environment and pro-business policies. These factors, along with the region’s efforts toward economic diversification and strategic privatisation, have been attracting more institutional investors.

Mohammed Al-Ardhi, Executive Chairman of Investcorp, highlighted the significance of CIC’s commitment. “This commitment by CIC, one of the world’s largest sovereign wealth funds, is a testament to Investcorp’s unparalleled franchise in the GCC and reinforces the trust placed in the firm’s global platform and teams,” he said.

Hazem Ben-Gacem, Co-CEO of Investcorp, emphasised that the new fund would facilitate cross-border cooperation and investments between the GCC and China, further solidifying their trade and economic relationships.

The economic connections between China and the Middle East have been historically robust. In 2023, China’s exports to Saudi Arabia and the UAE amounted to $42.86 billion and $55.68 billion, respectively. Meanwhile, China’s imports from Saudi Arabia totalled $64.36 billion in the same period.

The growing collaboration also involves central banks. In November 2023, Saudi Arabia’s central bank, known as SAMA, and the People’s Bank of China signed a local currency swap agreement worth $6.93 billion. The three-year agreement is expected to strengthen financial cooperation between the two nations and promote the use of local currencies in trade and investment.