NEW YORK (CNNMoney.com) -- China raised eyebrows on Wall Street and in the red-hot private equity business last month when its state-run investment arm agreed to buy a stake in Blackstone Group, one of the leading private equity firms in the United States.
The question now is which governments will be the next to partner up with a major private equity firm?
Oil-producing nations - which have benefited from the climb in oil prices over the last five years - are believed to be among the most likely candidates. The surge in oil prices has sent the value of their oil exports soaring - creating huge trade surpluses and lots of cash for governments in the Middle East and Central Asia.
According to Morgan Stanley, the cumulative surplus in trade and investments for oil-producing countries in those regions soared to 20 percent of GDP last year, up from 5.4 percent in 2002.
Oil states don't publicize much about their investments so tracking where their funds are going can be difficult. Ramin Toloui, senior vice president at bond manager Pimco, estimates that so far, the oil nations have plowed most of their oil riches into low-risk assets like U.S. Treasury bonds.
But some governments have been putting money into more aggressive, return-oriented investment funds, he wrote in a report earlier this year.
And Gulf states would not be alone in seeking higher returns by buying into private equity firms. Investors around the world have piled into the risky, but lucrative world of private equity in recent years.
Dubai, part of the United Arab Emirates, has formed its own private equity firm, Dubai International Capital, which in turn has done deals with some of the most prominent names in the buyout business.
Dubai International Capital, for example, sold the Tussauds Group to Blackstone earlier this year, and as part of the deal, received a 20 percent stake in a newly combined group of tourist attractions.
And the Abu Dhabi Investment Authority (ADIA) - considered one of the most powerful institutional investors in the world - reportedly bought a 40 percent stake in a fund that Apollo Management, another prominent U.S. private equity firm, listed in Europe last year.
Owning part of a private equity firm is different from merely investing in its funds. China's deal - considered the first of its kind - gives it a stake in Blackstone's management company and the lucrative fees it generates. That could prove an attractive structure for Gulf states seeking to improve their returns and also to get a crack at the U.S. buyout firms.
"This is speculative, but if Middle Eastern financial institutions were to team up with domestic U.S. private equity firms, that would be a way for them to take equity ownership in U.S. assets," said Christopher Ruppel, a senior geopolitical analyst with energy consulting firm John S. Herold Inc.
Still, there is some hesitancy among Persian Gulf states to invest in the United States after the collapse last spring of Dubai Ports World's effort to manage U.S. ports, said Saad Rahim, manager of the country strategies group at energy consulting firm PFC Energy.
"The big issue is a question of political backlash. Dubai Ports World scared a lot of people in the Gulf and made them wary of large investments in the U.S.," he said.
But the way deals are structured could help defuse political tension. For example, under its agreement with Blackstone, China limited its ownership to 10 percent and took a non-voting stake.
Phillip Phan, a professor of management at Rensselaer Polytechnic Institute, thinks China's move will pave the way for similar deals.
"It sends a strong signal," he said, and gives comfort to other institutional investors that may be leery of the risks associated with private equity. 
