GCC capital looks West today, but Asia’s opportunity set is quietly widening

Capital from the GCC has historically gravitated toward Western markets, driven by regulatory familiarity, governance standards and scale. That allocation bias remains intact, but Lighthouse Canton is beginning to see Asia feature more prominently in portfolio construction, particularly where visibility, credibility and political stability align according to Vijay Bhatia, Managing Director at Lighthouse Canton as told to Lighthouse Canton's IDEAs Views & Insights.‍

“The larger share of wallet still goes westwards, Europe and the US remain the dominant destinations, both in terms of comfort and transaction size. However, Asia is increasingly part of conversations and allocations, particularly in a more selective and structured manner.” said Bhatia.‍

That trend is consistent with global allocation data. According to estimates compiled by Global SWF, GCC sovereign and institutional investors collectively manage more than $4 trillion in assets, with a majority deployed across developed Western markets, reflecting long-standing preferences for depth, liquidity and legal clarity.‍

Bhatia said those same considerations shape private wealth flows.‍

“When investors look at Asia, they do multiple projects, but the investment sizes are typically smaller than comparable investments in Europe or America,” he noted. “That naturally keeps Asia’s portfolio share lower.”‍

Still, he said Asia is no longer viewed as peripheral.‍

“The conversation has shifted from whether to look at Asia to how and where,” Bhatia explained.

WHERE ASIA IS STARTING TO MATTER

Asia’s appeal to GCC investors is increasingly defined by specific markets, sectors and structures, rather than broad regional exposure.‍

Singapore remains the most established gateway, benefiting from its reputation as a safe, organised and internationally familiar financial centre.‍

“Singapore offers clarity,” Bhatia said. “Singapore has well defined and respected regulatory framework that offers stability and predictability are well defined, exits are straightforward, and investors know what to expect.”‍

Beyond Singapore, he said interest is becoming more selective. Korea has emerged as a market drawing attention due to its institutional depth and political stability, while certain China-linked strategies accessed through regional hubs continue to resonate with investors seeking scale and brand familiarity.‍

“At the end of the day, credibility matters,” Bhatia said. “If it’s a recognised platform or a name people already trust, capital will engage.”

‍He added that sector choice is just as important as geography.

“Brick-and-mortar businesses and established operating models are far easier for investors to understand than emerging or experimental sectors,” Bhatia said, noting that operating businesses, income-generating assets and scaled platforms tend to draw stronger interest.

‍He said Asia’s lower valuations compared with Western markets are also increasingly part of the conversation, even if they do not yet translate into dominant allocations.

“Asia is attractively priced,” Bhatia noted. “But investors still need confidence around governance, exits and currency outcomes.”‍

India remains a market of long-term interest, particularly for non-resident investors, though currency dynamics play a role in sizing exposure.

“Returns can be strong,” Bhatia said. “But consistent currency depreciation affects dollar outcomes, and that factors into allocation decisions.”‍

For sophisticated investors, Asia private markets remain a natural entry point.

“These investments are generally suited to investors who already understand private markets,” Bhatia said.

He added that non-sophisticated investors often find more comfort in public markets, where liquidity, pricing transparency and diversification present pockets of opportunity across parts of Asia.

WHY THE SHIFT IS GRADUAL, NOT SUDDEN‍

Bhatia said Asia’s slower capital absorption reflects structural realities rather than a lack of opportunity. Political stability, regulatory predictability and ease of capital repatriation remain decisive in family and institutional investment decisions.‍

“Before investing, the first question is always about exit,” Bhatia said. “Investors are comfortable taking business risk. They are not comfortable with uncertainty around getting their capital back.”‍

That explains why some emerging Asian markets struggle to attract sustained GCC inflows despite attractive growth stories.

“Putting money in can be easy,” Bhatia said. “Taking money out is where confidence is tested.”‍

He added that conservative European investors based in the GCC tend to allocate to Asia cautiously.

“For them, Asia is usually a smaller sleeve of the portfolio,” Bhatia said. “Five to ten percent, rather than a core allocation.”‍

Middle Eastern investors, by contrast, tend to show greater flexibility.

“They are more return-oriented,” Bhatia said. “That gives Asia a broader opportunity set over time.”‍

A LANDSCAPE SHAPED BY GLOBAL MIGRATION

Asia’s gradual rise in relevance is unfolding against a broader shift in the GCC’s investor base itself. Dubai’s population growth and internationalisation are reshaping both the source and destination of capital.‍

“Dubai is a melange of multiple nationalities,” Bhatia said. “That diversity changes how wealth is created and how it is deployed.”

He noted that this diversity is creating a wide spectrum of client needs and preferences, opening opportunities for firms able to operate across regions and asset classes.‍

The city’s appeal continues to draw global wealth. According to Henley & Partners, the UAE ranked as the top global destination for net millionaire inflows in 2024, reinforcing its role as a capital aggregation hub rather than just a regional centre.

Bhatia said this matters for Asia exposure.‍

“As new communities settle here, their historical investment preferences evolve,” he said. “Over time, that creates space for Asia to feature more meaningfully.”‍

For Lighthouse Canton, that shift is already shaping strategy. “You don’t need to force Asia into portfolios,” Bhatia said. “You need to be ready when clients are comfortable engaging.”

He added that preparation, rather than prediction, is the differentiator. “This is a young city that continues to evolve rapidly, and that evolution shapes investor behaviour,” Bhatia said.

“The Asia wave will not arrive overnight, but when it builds, it will favour platforms that understand both regions and can bridge them responsibly.”