The large Middle East funds are run on commercial lines, and therefore any future US fund regulation should not treat them in the same way as Russian or Chinese funds, said Maria Bartiromo, the anchor of CNBC's global business news show Closing Bell.
"The Middle East funds want to allocate their dollars into the US, and there is already a meeting of the minds. Both sides want things to work, which is positive," said Bartiromo, talking to Gulf News about how the Gulf funds are in regular touch with US authorities.
Supporting the need to reach an accommodation, many US financial institutions cannot ignore or shut out such a significant source of capital as the Gulf funds.
"The US financial service institutions are in constant search of capital and they will continue to talk to sovereign wealth funds," Bartiromo said.
"Unfortunately what is happening in the US is a taste of protectionism, under which regulators have decided to put funds from all countries together. Congress is set to put legislation in place which will seek to scrutinise everyone," said Bartiromo.
However, after talking to many fund managers in the Gulf, Bartiromo was clear that in the end the two sides, the Middle East funds and the regulators, will find agreement based on transparency.
This is in contrast to the negative reaction she foresees from the Chinese and Russian funds to the US authorities, since "they do not want transparency, and will not react in the same way as the Middle East funds", she said.
"They have different motives. The motives of the Middle East fund managers are to make money, and to get returns. I do not know the others' motives, but if the regulators are questioning some motives it appears that they are questioning Russia and China. They are bucketing them all together."
As an example of how the Gulf funds are commercially driven, she quoted Shaikh Hamad Bin Jasem Al Thani, Prime Minister and Foreign Minister of Qatar, and head of the Qatar Investment Authority, which has invested in major stocks like the Blackstone Group, Credit Suisse. These stocks have dropped sharply since their investment, but this has not dampened their enthusiasm for investing in financial services companies in the US.
Asked by Bartiromo if QIA would pull out of this situation, Shaikh Hamad said: "No, not at all. In fact, because we bought Blackstone at 30 and it is now at 13, we have actually bought more to average out the cost."
The slowdown in the US will start to bottom out in the second half of 2008 as the many stimulae from Washington take effect, leading to an improvement by 2009, although the market will sense this in advance and Bartiromo expects a change in sentiment later this year.
"The US is slowing down sharply, but the stimulus that is coming out of Washington will work its magic. We have rebate cheques coming out of Washington in May, people will spend that money. Interest rates are coming down. There is an enormous amount of liquidity from the Federal Reserve and global central banks," she said.
"All this stuff will have an impact. Most people are expecting the sub prime debacle to go into the second half of this year and maybe into 2009, but the good news is that you will see the markets trading up a few months earlier."
The economic vibrancy around with world is a very important part of how any recovery will happen, said Bartiromo, who was very clear that the US cannot decouple from the rest of the world.
"We could easily talk ourselves into a recession, since in the US all you hear about is lay offs, and negative headlines. But when you come to this region, and all I hear about is construction, and revamping, and revitalisation. And it is the same in China and India."
All this economic activity feeds back into the US in several ways, one of the more obvious being that "more than 50 per cent of the S& P 500 companies generate a majority of their revenues from the international markets," she said.