Mideast Money

Sovereign wealth funds in the Persian Gulf are not just buying chunks of beaten-down blue-chip companies. They're moving into leveraged buyouts, sometimes alongside private equity firms and sometimes by themselves, despite having little experience operating companies. Some are joining forces with hedge fund activists. They're making bold moves to earn stronger returns, preparing for a post-oil world. Bankers estimate Gulf funds earned $180 billion from investments in 2007—more than half the $315 billion they collected in oil and gas revenues.