Sovereign funds with massive liquidity are contributing to the global mergers and acquisitions market, which has exceeded $3.5 trillion in value since the beginning of the year, driven by a series of major deals involving funds from the Middle East and Asia.
Blackstone Inc. and TPG Inc. announced Tuesday an agreement to acquire medical device company Hologic Inc. for up to $18.3 billion, including debt, with the Abu Dhabi Investment Authority and Singapore's sovereign wealth fund GIC Pte. Ltd. participating as minority investors.
Last week, BlackRock Inc. partnered with Mubadala Investment Company's artificial intelligence company MGX in a $40 billion deal to acquire Aligned Data Centers. A week earlier, Carlyle Group Inc. partnered with the Qatar Investment Authority to buy BASF SE's coatings unit in a deal that valued the unit at €7.7 billion ($8.9 billion).
Last September, Saudi Arabia's Public Investment Fund, whose board of directors is chaired by Crown Prince Mohammed bin Salman, agreed to acquire video game company Electronic Arts Inc. and take it private in a leveraged buyout deal valued at $55 billion, the largest of its kind in history.
Sovereign funds are also expanding their internal investment teams to make more direct investments, allowing them to generate profits without paying fees to Wall Street banks. They are also among the most prominent supporters of private equity funds and have succeeded in obtaining privileges that allow them to participate directly in deals alongside these funds, in exchange for the financing they provide.
Huge investments in artificial intelligence and technology
The technology sector in particular has seen increased activity from these funds. In August, the Abu Dhabi Investment Authority backed Thoma Bravo's acquisition of human resources software provider Dayforce Inc. for nearly $12 billion.
MGX, an Abu Dhabi government-backed company overseen by Sheikh Tahnoon bin Zayed Al Nahyan, invested in OpenAI at a $500 billion valuation, supported Elon Musk's xAI project, and plans to contribute to US President Donald Trump's Stargate project.
In contrast, Singapore's GIC and the Qatar Investment Authority have both invested in rival AI company Anthropic.
According to data compiled by Bloomberg, merger and acquisition (M&A) deals rose 34% this year to $3.5 trillion, putting 2025 on track to be the best year since 2021, with more than $1.3 trillion in deals recorded in the third quarter alone, driven by a number of megadeals.
Wall Street expects the wave of deals to continue.
Senior investment bankers expect the acquisition wave to continue in the coming period, with Goldman Sachs predicting that deal activity will accelerate by the end of the year, with 2026 likely to witness a new record in the mergers and acquisitions market.
Sovereign funds continue to seek new opportunities, with Mubadala's asset management arm considering acquiring outdoor advertising company Clear Channel Outdoor Holdings Inc., which has a market value of about $930 million, Bloomberg News reported last week.
These funds' investments are also expanding beyond direct acquisitions. The Qatar Investment Authority participated in a funding round of more than $2 billion for the new company founded by Hollywood celebrity agent Ari Emanuel, alongside other investors such as Apollo Global Management and Ares Management.
