Funds and firms in the world's biggest oil-exporting region have been snapping up assets from Japan to Africa as their government-owners reap the windfall from a five-fold increase in
crude prices since 2002.
Gulf investors have spent more than $70 billion on foreign acquisitions this year, twice as much as the record set in 2005, to reduce reliance on oil revenue.
Increasingly Gulf buyers are running into resistance from governments wary of allowing foreigners to control assets they say could affect their economic interests and national security.
Dubai's DP World relinquished control of U.S. ports after lawmakers threatened to block its 2006 acquisition of British rival P&O on national security grounds.
Dubai Aerospace Enterprises' failed attempt to buy New Zealand's Auckland International Airport Ltd. and Borse Dubai's offer to takeover Nordic exchange operator OMX encountered
political opposition this year.
The growing power of sovereign wealth funds is raising concerns in the West, with the Group of Seven industrial nations calling for greater scrutiny of their role this year.
Still, the initial response to the Citi investment was different, even though it came from the largest and most secretive of these funds.
U.S. Senator Charles Schumer, who opposed the DP World deal and raised questions about Borse Dubai's plans to swap stakes with Nasdaq Stock Market Inc, said ADIA was helping New York retain its status as the world's financial centre.
Opportunities for China
The U.S. mortgage crisis could hold similar opportunities for investors from other emerging markets, especially China, which is still smarting from Washington's opposition in 2005 to
CNOOC's bid for U.S. oil firm Unocal.
"Emerging economies have welcomed Chinese investors with open arms but acquisitions in developed markets have been more problematic for them so far," Flemming Nielsen, Asia economist at Danske Bank in Copenhagen.
"It may still be a problem but my guess is pricing and banks' liquidity problems may make it more possible," he said.
Bear Stearns agreed a $1 billion equity swap with China's CITIC Securities last month and industry sources said China Jianyin Investment Securities, controlled by an arm of the central bank, was eyeing a tie-up with a global brokerage, possibly Merrill Lynch.