Geopolitical Tensions Drive Chinese and Middle Eastern Investors to Increase Investments in Brazil
As private equity funds pull back, strategic investors from China and the Middle East are seeking opportunities in Brazil, attracted by the country’s growth potential and economic stability.
Market volatility stemming from the war in the Middle East and trade restrictions imposed by the U.S. government on China are affecting mergers and acquisitions activity in Brazil, increasing the number of strategic investors from China and the Middle East seeking companies in the country and across Latin America.
“We are seeing private equity funds being replaced by strategic investors, as well as growing interest from Chinese investors due to geopolitical considerations and the size of the Brazilian market, while Japan and the Middle East have also regained significant interest,” said Daniel Wainstein, co-CEO of Seneca Group. Private equity funds have been losing ground in M&A transactions, pressured by high interest rates and the lack of IPOs, which makes it more difficult to exit investments.
According to Wainstein, the pullback by private equity funds is helping create a favorable environment for strategic investors, which take a broader view of Brazil’s overall potential and tend to have a longer-term investment horizon. “Chinese investors have been preparing for quite some time to take advantage of this window of opportunity, with less competition from funds on one side and companies in need of capital on the other,” he added.
Wainstein, who recently hosted a delegation of Chinese entrepreneurs, also noted that the profile of Chinese investors has changed as their focus has diversified beyond sectors traditionally linked to national strategic interests, such as infrastructure.
Experts interviewed by Estadão/Broadcast said that major Chinese investments remain concentrated in power, agribusiness and logistics infrastructure, but attention has increasingly shifted toward mining, rare earths and solar energy. The latter sectors, together with the automotive industry, have been among those facing restrictions from the United States.
“Tensions between China and the United States are reducing their access to certain markets, and Brazil has become a very attractive alternative in the automotive sector,” said Alexandre Pierantoni, Head of Latin America and Brazil Corporate Finance at Kroll Corporate Finance.
Brazil, meanwhile, introduced incentives for imports of electrified vehicles, which expire at the end of this year, providing an additional catalyst for local production. Chinese automakers BYD and GWM have already invested billions in manufacturing facilities to produce vehicles in the country.
According to Pierantoni, this movement is expanding, with Chinese investors increasingly targeting the auto parts supply chain, where demand has been “extremely strong.” “Deals have not yet been completed, but there is a significant amount of prospecting by Chinese investors,” he added. Pierantoni noted that Chinese diversification in M&A extends beyond these areas. Investors are also looking at companies serving the mining industry, including yellow-line equipment manufacturers, such as heavy machinery, and explosives producers.
They have also been making smaller-than-usual investments in companies with technology and artificial intelligence capabilities in sectors where they already have a presence, such as agribusiness and mining.
According to Guilherme Bueno Malouf, Head of M&A at law firm Machado Meyer, the strong relationship between Brazil and China is also contributing to the increase in Chinese transactions. “Geopolitical considerations are relevant. They are not explicitly stated in transactions, but we know that greater ideological alignment tends to drive stronger demand,” he said. Malouf also noted that Brazil is a strategic market and believes that part of the U.S. tariff war is a response to China’s growing presence in Latin America, particularly in Brazil.
“China is moving full steam ahead,” said Martha Leonardis, founder and CEO of international business consultancy NewCo. According to her, Chinese investment increased by US$2 billion last year compared with 2024, exceeding US$6 billion across 52 projects.
Leonardis noted that China is more mature than the Middle East in terms of investment activity in Brazil and that Middle Eastern investors tend to look at the broader region rather than Brazil specifically, typically with an expansion-oriented approach. Another difference is that, unlike Chinese investors, which tend to prefer controlling stakes, Middle Eastern investors generally seek minority stakes with board representation. “They do not have the human capital to take control of a company,” she said.
Despite being part of the same region, Middle Eastern countries have different investment approaches, reflecting the specific circumstances each country is facing, Leonardis said. The regional conflict, for example, has led some countries to pull back and focus on domestic challenges, including Qatar and Bahrain, which had previously been opening up to overseas investments. Likewise, hospitality and real estate, previously among the sectors most actively targeted by certain Middle Eastern countries, have fallen off the investment agenda in the current environment.
Conversely, Oman, which has a sovereign wealth fund of approximately US$50 billion, and Saudi Arabia are highly active in seeking opportunities, although their focus is generally on companies that are also interested in investing in their respective countries. “They provide subsidies and incentives for these investments locally, in partnership with sovereign wealth funds, which is attractive to Brazilian companies seeking to expand internationally,” she said. According to Leonardis, one-third of the acquisition value must be directed toward business activities in the investor’s home country.
According to her, investors from Oman and Saudi Arabia have been exploring opportunities in infrastructure, mining, food, rare earths and data centers, with the latter two themes having entered their investment agendas only in recent years. “We are hosting a delegation from Oman in November, which was also here in July,” she said.
Leonardis said Abu Dhabi has significant investment potential, given that its sovereign wealth fund holds US$1.7 trillion in assets, although the number of completed transactions remains far below the volume of opportunities it evaluates. Mining and infrastructure are the main sectors of interest, again with an emphasis on local investment commitments. “It is a greenfield region where virtually everything represents an opportunity, and, if they could, they would rather bring in intellectual and technological capabilities than invest directly in the company,” she said.
In June of this year, Abu Dhabi Ports Group, which operates major maritime and logistics infrastructure in the United Arab Emirates, acquired Corredor Logística de Infraestrutura (CLI), located at the Port of Itaqui in São Luís, Maranhão, for US$835 million, approximately R$4 billion, marking its entry into Brazil’s port sector as part of a broader food security strategy.
By early 2025, sovereign wealth funds from Gulf Cooperation Council countries, Saudi Arabia, Bahrain, Qatar, the United Arab Emirates, Kuwait and Oman, had accumulated more than US$14 billion in investments in Brazil, according to a survey conducted by the Sovereign Wealth Fund Institute (SWFI) at the request of Estadão/Broadcast.
Leonardis noted that the figure demonstrates that Gulf capital already has a meaningful presence in Brazil, as the accumulated investment alone was equivalent to at least 1.2% of the country’s total stock of foreign direct investment. At the same time, she added that the estimate is conservative, as it primarily covers sovereign wealth funds and does not fully capture strategic companies, family offices, private capital or transactions for which values have not been publicly disclosed.
Published on 09/18/2026 and available at:
Comments