Institutional investors add risk, outlook more positive for 2021
Institutional investors add risk, outlook more positive for 2021/node/1836076/business-economy
Institutional investors add risk, outlook more positive for 2021
Investors had a more positive outlook for 2021, having reached a risk-neutral level across asset classes after starting last year with the highest cash levels since the 2009 financial crisis. (Reuters)
Institutional investors add risk, outlook more positive for 2021
Sovereign fund investments in private markets more than doubled during 2020 to $50.3 billion
This was in part due to funds helping out their portfolio companies hit by the pandemic, study finds
Updated 02 April 2021
Reuters
LONDON: A rotation by sovereign wealth funds and other institutional investors to add risk since the COVID-19 pandemic, moving from cash and bonds to stocks, may have further to run as many still have large cash positions, according to research published Thursday.
Investors had a more positive outlook for 2021, having reached a risk-neutral level across asset classes after starting last year with the highest cash levels since the 2009 financial crisis, the research from State Street Corporation and the International Forum of Sovereign Wealth Funds (IFSWF) found.
Many are also adding to their exposure within private markets, with a particular focus on infrastructure and real estate, hastened by low real returns in public markets, according to the findings, based on State Street data and an IFSWF survey of seven of its largest sovereign fund members.
For example, sovereign fund investments in private markets more than doubled during 2020 to $50.3 billion, IFSWF data showed, in part due to funds helping out their portfolio companies hit by the pandemic.
“The current macroeconomic environment, anticipated fiscal stimulus and portfolio positioning of institutional investors and sovereign wealth funds present reasons to be optimistic as we move further into 2021,” said Neill Clark, head of State Street Associates, Europe, Middle East and Africa at State Street.
There was a marked uptick in interest in US equities in 2020, with IFSWF data showing over $16 billion invested across 46 deals in 2020, up from $2 billion across 28 deals in 2019.
The rise was largely due to Saudi Arabia’s Public Investment Fund’s countercyclical investments in energy, consumer and financial sectors at the peak of the crisis in the second quarter.
Institutional investors also scaled back investments in emerging markets and withdrew from investments in Britain during 2020, according to the research.
Still, IFSWF data indicated an uptick in sovereign fund investments in the country to $4.4 billion in 2020 compared with $1 billion in 2019, almost two-thirds in private markets, as funds eyed deals in the battered economy.
With assets such as global stocks and bitcoin near record highs, talk of bubbles in certain sectors has increased this year.
Yet State Street said it did not see evidence of bubble behavior and sovereign funds surveyed in the report were generally not worried either.
One IFSWF member surveyed did express concern about the number of special purpose acquisition company (SPAC) initial public offerings, the number of tech firms trading at more than 20 times revenues and multiples that private equity firms are paying for deals.
Building bridges: Saudi Arabia leads Gulf-Asia tech leap
Updated 01 January 2026
Waad Hussain
ALKHOBAR: Saudi Arabia is forging new academic connections with Asia as the Kingdom’s Vision 2030 accelerates reforms in education and innovation.
Two academics — Prof. Eman AbuKhousa, a data science professor at the University of Europe for Applied Sciences in Dubai, and Prof. Hui Kai-Lung, acting dean of the HKUST Business School in Hong Kong —emphasize that the Kingdom’s transformation is reshaping the development of artificial intelligence and fintech talent across the region.
For AbuKhousa, responsible AI is not just about technology; it is fundamentally about intention. “It is about aligning technology with human values: ensuring fairness, transparency, and accountability in every system we build.”
She highlighted that the Middle East’s heritage of trust and ethics gives the region a competitive advantage. “Institutions should embed ethics and cultural context into AI education and create multidisciplinary labs where engineers collaborate with social scientists and ethicists,” she said.
At the University of Europe for Applied Sciences in Dubai, AbuKhousa trains students to question data, identify bias, and integrate integrity into innovation.
Asian universities like HKUST play a growing role in cross-border education partnerships with Saudi institutions.
“Educators must model responsible use by explaining how data is sourced and decisions are made,” she explained. “Ultimately, responsible AI is less about algorithms than about intention; teaching future innovators to ask not only ‘Can we?’ but ‘Should we?’”
She further noted:“Saudi Arabia’s Vision 2030 has turned digital education into a national movement placing technology and innovation at the heart of human development.”
AbuKhousa emphasized the transformative opportunities for women in the Kingdom: “Today, Saudi female students are designing models, leading AI startups, and redefining what digital leadership looks like.”
Prof. Hui views this transformation through the lens of fintech. “Fintech is deeply embedded in Vision 2030, serving as a key enabler of its three pillars: a vibrant society, a thriving economy, and an ambitious nation,” he said.
Hui stressed that Saudi Arabia’s investment capacity and modern regulatory framework “create a conducive environment for innovation.” Having collaborated with Aramco, The Financial Academy, and Prince Mohammed Bin Salman College of Business and Entrepreneurship, he highlighted the strategic potential of the Kingdom’s young population. “The Kingdom has one of the youngest populations in the world, with a median age below 30,” he said.
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“This demographic presents a tremendous opportunity for higher education to shape future leaders, and our collaborations in Saudi Arabia are highly targeted to support this goal.”
AbuKhousa argued that universities must lead innovation rather than follow it. “Universities must evolve from teaching institutions into innovation ecosystems,” she said. “The real bridge between research and industry lies in applied collaboration: joint labs, shared data projects, and co-supervised capstones where students solve live industry challenges.”
“At UE Dubai, we’ve introduced an Honorary Senate of Business Leaders to strengthen that bridge, bringing decision-makers directly into the learning process,” she added.
DID YOU KNOW?
Vision 2030 has made digital education central to Saudi Arabia’s development strategy.
Women in Saudi Arabia are now designing AI models and leading startups.
Universities are transforming into innovation ecosystems bridging research and industry.
Cross-border collaborations with Hong Kong and Dubai are accelerating fintech and AI growth.
Hui noted that cross-border cooperation between Hong Kong and Saudi Arabia is growing rapidly. “Saudi Arabia’s scale, strategic location, and leadership in the Arab world offer Hong Kong an ideal partner,” he said. “Hong Kong’s academic and regulatory experience can help the Kingdom fast-track its digital transformation.”
He highlighted lessons from Hong Kong’s fintech journey. “Hong Kong’s fintech journey offers critical lessons for Saudi Arabia, particularly in creating a balanced ecosystem for innovation,” he said. “Education and regulation are both important. We need education at all levels and beyond schools to expose people to these ideas; having diverse and rich experiences also helps, as the education needs to be supplemented by real-life implementation and usage experience. That is what Hong Kong can offer.”
AbuKhousa emphasized that women’s participation in technology must extend beyond access to influence. “Empowering women in technology begins with reimagining representation: from inclusion to influence,” she said. “We need more women not only learning tech, but leading teams, designing systems, and shaping AI policy. Institutions must normalize women’s presence in decision-making spaces and provide visible mentorship networks to counter imposter syndrome.”
Both experts agreed that innovation must remain human-centered and accountable. “As AI becomes integral to financial systems, governments must strike a careful balance between innovation, data ethics, and compliance,” Hui said. “Establishing clear regulatory frameworks and transparency standards is crucial.”
AbuKhousa concurred, emphasizing the role of education in AI adoption: “Educators must position generative AI as a thinking partner, not a shortcut. The goal is to teach students how to use AI critically, not merely that they can.”
Hui predicts that “AI, blockchain, and cybersecurity will be transformative forces in the region’s financial sector.” AbuKhousa sees a similar momentum in education: “The Gulf is entering a defining phase where AI becomes the backbone of education and workforce development.”
The experts concluded that the Kingdom’s digital transformation, anchored in Vision 2030, is connecting classrooms, industries, and continents through human-centered innovation.
