Importance of Arabic & SWFs in the Middle East

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1. A shortage of Arabic-speaking students in the West

Mandarin and Japanese have been praised as important business languages, in contrast with 'less important' languages like Arabic.

This sentiment resonates with government initiatives, such as Obama's '1 million strong' (Mandarin) and university enrollment rates where Chinese and Japanese largely outstrip the number of Arabic speakers.

0.3% of the United States speaks Arabic. This number is likely much less in high finance, with Caucasian and Asian students dominating positions at bulge-bracket investment banks -  versus students of North African and Middle Eastern descent that are more likely to speak Arabic.

I recently attended the Hedge Fund Rocks Award Night in Sydney. I looked around the room and I thought, 'I doubt a single person here speaks Arabic.' Nevertheless, I found a couple PMs managing Middle Eastern SWF money.

2. Sovereign wealth funds

I do not purport that Arabic is essential in raising funds in the Middle East, but it helps.

Many of the world's biggest SWFs lie in the Middle East. This includes:

  1. Abu Dhabi Investment Authority (830b)

2. Kuwait Investment Authority (640b)

3. Saudi Arabian Monetary Authority Foreign Holdings (520b)

4. Qatar Investment Authority (320b).

SWF money is mainly oil and natural gas money bunked away for the future. With oil demand growth increasing in the next few decades, albeit at a slower rate, it is likely these SWFs will continue to grow.

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