Investors From Middle East Eye Western Markets for Stability, Ironhold Capital Founder Says
Middle Eastern investors are steering capital toward the US and other Western markets in search of secure and economically attractive opportunities, according to Paul Gray, founder and managing partner of New York-based investment firm Ironhold Capital.In an interview with, Gray said investors were moving capital from the Middle East to the US and other Western markets, as Middle Eastern assets were seen as expensive compared to opportunities elsewhere."The wealthy folks in the Middle East want to invest in the West," Gray said. "We've gotten a couple of calls ourselves, even though it's not our specialty. Typically, we raise money here in the States, but we've gotten a couple of calls from people out there just looking to get some diversification, looking to invest in a Western market where their money is going to be protected by the US government."Multiple media outlets cited Musabbeh Al Kaabi, Abu Dhabi National Oil CEO of upstream operations, earlier this month that the UAE state-owned energy major is looking for opportunities in Canada's upstream and liquefied natural gas sectors via its international arm, XRG.In April, the Financial Times reported that the company intends to invest tens of billions of dollars to establish a natural gas business in the US as part of its efforts to diversify. The company is assessing 29 possible deals as part of its plan to create a vertically integrated global gas business, the report said, citing Nameer Siddiqui, the chief investment officer of XRG.Last November, Saudi Arabian energy giant Aramco unveiled 17 memoranda of understanding and agreements with major US companies, with a potential combined value of more than $30 billion. The deals build on 34 MoUs and agreements unveiled in May that carried a potential value of about $90 billion. Together, the agreements support potential collaboration opportunities between Aramco and US companies worth around $120 billion, the company said in a statement issued then.The agreements included an MoU with MidOcean Energy on a potential investment in the Lake Charles liquefied natural gas project as well as a deal with Commonwealth LNG covering its Louisiana liquefaction project and the potential purchase of LNG and gas by Aramco Trading.According to Gray, putting investor money in higher-risk energy markets like Nigeria, Guyana, and Brazil is risky because of political instability. Venezuela despite its huge energy reserves required significant capital investment due to its technological limitations. However, countries like the US and Canada provided a sense of security to investors due to its as democratic systems with established constitutions and legal frameworks."So, money that you and your investors put into the market in a sense is protected by the government, so to speak. Because they're protecting your interests," Gray said.On renewables, Gray said despite the advances made in the sector, the limitations in technology to store such energy meant that fossil fuels were here to stay for at least the next decade. "Obviously, solar, wind, they've made some progress. But there's been very limited progress in batteries, storing energy because we do a decent job of capturing energy. But being able to store it and hold it for a long time and then distribute it on a grid, it's not quite there yet.""I think countries should certainly move in that direction because that's where the technology is going. But like I mentioned before, it's not good enough for us to get rid of oil and gas entirely."A stronger pivot towards renewables is now seen as a stronger possibility as world leaders advocate alternative energy sources.President of the European Commission Ursula von der Leyen has called for electrification across Europe to speed up the shift to a more secure, affordable, and competitive clean energy future, while condemning the weaponization of fossil fuels, which she said left economies vulnerable.