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Reasons Behind Bahrain Boosting Investments in UK

Bahrain, along with other Persian Gulf countries, is gearing up for a significant increase in investments in the United Kingdom, with a focus on diverse sectors such as property, tourism, banking, healthcare, and hospitality.


The move is driven by the ambitious plans of Bahrain's sovereign wealth fund, Mumtalakat, to expand its portfolio in the UK. This strategic decision aligns with the broader trend among Gulf nations, including Qatar and Saudi Arabia, who have been actively investing in various sectors in the UK in recent years.


The Mumtalakat, established in 2006, may not be as substantial as some of its neighboring sovereign wealth funds, but it boasts an estimated £14.4 billion worth of assets. One of its notable UK investments is McLaren, the racing car maker based in Woking. The recent restructuring approval for McLaren signals Mumtalakat's commitment to fostering partnerships and collaborations with other motoring groups.


According to a senior source, Mumtalakat is eyeing opportunities arising from the 're-industrialization' of the North of England. The source emphasized that the UK has the potential to turn Brexit into a strength if the economy is adapted appropriately. This indicates Mumtalakat's optimism about the economic prospects in the post-Brexit era, particularly in regions like the North of England.


Mumtalakat's interest spans various sectors, including property, tourism, banking, healthcare, and hospitality. This diversified approach reflects a strategic and opportunistic mindset aimed at broadening the fund's UK portfolio. The willingness to explore opportunities in the North of England aligns with the overall trend of attracting investments to revitalize and diversify regional economies.


Mumtalakat's Chief Executive, Sheikh Abdullah bin Khalifa, has expressed the fund's intention to become 'an engine for deals' and expand internationally. This ambition is in line with Bahrain's broader economic goals and follows the examples set by Qatar and Saudi Arabia in acquiring stakes in British companies, sports teams, and properties.


The ongoing negotiations between Britain and the Gulf Cooperation Council (GCC) for a free trade agreement further contribute to the attractiveness of the UK for Gulf investors. The potential £23.5 billion annual trade agreement underscores the economic significance of strengthening ties between the UK and the GCC, consisting of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates.


Gulf countries, buoyed by substantial oil and gas wealth, have been injecting billions of pounds into the UK in recent years through their sovereign wealth funds. Examples include Saudi Arabia's ownership of Newcastle United FC and a significant stake in Aston Martin, while Qatar controls a vast property portfolio, including iconic landmarks like the Shard skyscraper and Harrods.


The efforts to strengthen economic ties between the UK and Persian Gulf nations occur against the backdrop of geopolitical challenges, including the conflict between Israel and Hamas. Bahrain's public support for the UK and the US in protecting shipping amid tensions in the Red Sea highlights the multifaceted nature of diplomatic relations and economic partnerships.



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