Several India-focused venture capital, real asset managers, private credit and asset management firms have expanded to the Gulf over the last few years and opened offices, tapped limited partners, or launched dedicated vehicles to raise capital from the UAE and the wider Gulf Cooperation Council (GCC). But fresh commitments have slowed sharply in recent weeks, forcing some fund managers to redraw fundraising plans and explore investors in Africa and Europe instead.
Besides, some sovereign investors have informally indicated a preference for vehicles that will deploy capital locally.
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They also prefer backing sectors aligned with national economic development priorities.
An India-based alternative investment firm focused on real assets that opened its Dubai office two years ago told ET that investors want to wait for the fog of war to clear.
“We have close to $500 million in soft commitments,” said an executive at the firm, which is raising its first investment vehicle in the region.
“While investors have said that they understand the opportunity, and would like to invest, they would wait until they understand where the bottom is. They want to know much pain is left, and what the economic and workforce impact will be.”
India-focused firms that have been tapping Gulf capital or have set up offices in the region include Nisus Finance, Cedar Hill Capital, Quadria Capital, Aditya Birla Sun Life Realty Credit Fund, Evolvence India, Orios Venture Partners and ASK Asset and Wealth Management.
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“There’s a vacuum forming,” said Amit Goenka, chairman and managing director of Nisus Finance. “I’ve been meeting with my limited partners and banks. Banks have started operations, but private investors are being very conservative.
There is a lot of capital on the sidelines, but patience is required until this comes to finality.”
Nisus Finance launched a $500 million Gulf-focused real estate fund in Dubai in August 2024 and has invested in key assets in the city.
Cedar Hill Capital is not as badly affected as it’s raised more than 80% of the target but those in the early stages of fundraising are facing challenges.