In 2025, sovereign wealth funds (SWFs),  collectively manage over USD 13.4 trillion  in assets, reflecting their expanding influence on global markets and strategic sectors.These state-owned investors play a growing role in industries such as infrastructure (energy, transport), technology (artificial intelligence, data), health and agri-food, and luxury goods, with objectives that extend beyond financial returns to include geopolitical influence and access to innovation.  Their presence is particularly significant across Europe, the Middle East, and North Africa, where SWFs are increasingly active in shaping industrial strategies and fostering bilateral partnerships.

As their influence grows, governments are adapting foreign direct investment (FDI) controls to manage the potential risks posed by sovereign wealth funds, particularly in sensitive sectors. In the European Union, SWFs are typically treated as non-EU foreign investors, subject to screening frameworks that assess not only ownership but also indirect control, including board representation or access to strategic data. France, for example, applies stringent controls under its Monetary and Financial Code, while countries such as Germany and Italy have also tightened scrutiny in response to concerns over technological transfer, critical infrastructure, and political leverage. At the same time, Middle-Eastern funds such as Mubadala (UAE) and the Public Investment Fund (Saudi Arabia) are viewed both as strategic partners and as actors requiring regulatory clarity and safeguards.

To address this complex landscape, policymakers must strike a balance between economic openness and the protection of strategic sovereignty. Potential solutions include the development of sovereign compatibility criteria, transparency commitments, and co-investment models that align SWF capital with national priorities. Encouraging confidential pre-notifications and structured dialogue with authorities, including ministries of finance and strategic planning bodies, could also enhance mutual understanding. More broadly, the creation of a distinct regulatory status for transparent, long-term-oriented sovereign wealth funds may enable their constructive participation in European industrial policy, ensuring that national security and economic competitiveness are jointly preserved.