Want a Sovereign Wealth Fund? Look to Abu Dhabi

An American sovereign wealth fund is not a bad idea.

It’s old-fashioned to think of them as a tool for commodity-rich nations to grow their earnings—they have become tools that give nations outsized influence and a powerful expression of soft power. 

Singapore’s fund is over 160% larger than its economy. The UAE’s largest fund is over 200% of its GDP, while China’s two largest funds are nearly 13% of its economy. Why shouldn’t the United States have one? Carrier groups can only go so far—this is the age of business, and countries want investments. China’s international infrastructure investments are over 890% larger than those of the United States. Washington cannot compete for global influence without having an investment tool that represents the greatest economy in the world. 

The United States can grow a fund that dwarfs all others. At $6.7 trillion, its annual federal budget is larger than the top five sovereign wealth funds combined. 

Trump’s move to establish a sovereign wealth fund may be controversial, but it is timely. When the White House is ready to write its policy, it should look to the country that sets the gold standard for leveraging a wealth fund—the UAE. 

Investments vs. Aid

Countries need tools to protect their interests and maintain their influence globally without the use or threat of force. 

Investments overtook aid as the most valued form of assistance—trade, not aid. Investments have an equalizing effect on bilateral relationships, as recipients offer returns to their investors. Furthermore, they have better optics, as investments endorse the economic health of recipient nations. 

In February 2024, the UAE announced that one of its sovereign wealth funds, ADQ, would invest $35 billion in a Red Sea resort in Egypt. This investment will bring a significant influx of currency to Egypt and create a multiplier effect in its economy. Meanwhile, Abu Dhabi has increased its influence with Cairo. 

Investment Diplomacy

Sovereign wealth funds are attractive diplomatic tools. They allow their owners to increase their diplomatic weight. 

The UAE integrates investments into its diplomacy—every state visit includes exploring investments. In January 2025, Hungarian Prime Minister Orbán visited Abu Dhabi. His meetings included executives from Mubadala and the Abu Dhabi Investment Authority (ADIA). Orbán wrote, “Today, the [UAE] is one of the world’s most important financial … [centers]. There is fierce competition for … investment opportunities here, from New York to Paris to Beijing.” 

In December 2024, UK Prime Minister Starmer visited Abu Dhabi. He described the UAE and Saudi Arabia as “…some of the UK’s most vital modern-day partners.” The UAE invests $140 billion in the EU. In 2024, the bloc sent a delegation to Abu Dhabi to promote its Capital Markets Union plan to attract Emirati investments despite the UAE being on the EU’s high-risk list. 

Funds and Clout

The size of sovereign wealth funds allows countries to create environments that attract wealth. 

Despite having only 1.2 million citizens, Abu Dhabi’s three largest sovereign wealth funds, ADIA, Mubadala, and ADQ, have a combined asset portfolio of $1.7 trillion.

Abu Dhabi has become the global ‘capital of capital.’ The funds create a large presence for the UAE in global finance. BlackRock CEO Larry Fink called Abu Dhabi a “…great place to attract international capital...” In 2024, foreign direct investment (FDI) inflows to the UAE increased by 35%. The country ranked first globally in terms of its relative ability to attract FDI. The UAE was also the top ‘wealth magnet,’ attracting 6,700 millionaires to move to the country in 2024—the United States was the second with 3,800 millionaires. 

American potential

The democratic principles of the United States will require a fund to have congressional oversight, limiting the Executive’s freedom. Norway boasts the world’s largest sovereign wealth fund at $1.8 trillion. It is also the most transparent. However, it is run independently as a financial asset rather than a foreign policy tool. Democratic norms may not be compatible with the flexibility required to use a fund as an expression of power.

To benefit from a fund as an expression of power, the allocation must be designed carefully and with sufficient oversight so that it will not be frozen by legal challenges. This will only work if Congress gives the White House the authority to determine its allocation, with an oversight structure immune to partisan politicking while preserving accountability. 

Washington does not need a sovereign wealth fund to prepare for economic uncertainty—it requires a foreign policy tool. Abu Dhabi’s outsized geopolitical stature speaks to the UAE’s proficiency in integrating its funds within state functions. 

The United States can take lessons learned from the Emirates and create a financial behemoth that serves American interests. A sovereign wealth fund may prove to be the most impactful expression of American power.