The Gulf Cooperation Council (GCC) sits on a vast amount of O&G resources, which is translated into 31% of all SWF capital globally. However, the six countries are home to fewer than 60 million people, of whom only 29 million are nationals entitled to pension benefits. Therefore, the public pension funds operating in the region have a much more modest size when compared to the global industry, at 2%.
Yet, the pool of capital has been increasing steadily and can no longer be ignored. Global SWF estimates that the 10 PPFs from the region now manage US$ 502 billion, a 25% more than six years ago.
The GCC has seen a consolidation process in both its SWFs and PPFs. The latter have changed, particularly this year in Oman where 11 different pension plans merged into two, and in Saudi Arabia, which combined GOSI and PPA to create the largest player in the peninsula.
For now, the increase of these pools of capital is limited to contributions growth by nationals and to investment returns. However, we have started witnessing a change in GCC immigration policies (e.g., UAE’s golden visas and Saudi’s citizenship to talented expats), and this could soon have an effect on the pension systems.
