GCC assets under management to reach $500 billion by 2026

The GCC asset management market is projected to grow to nearly $500 billion by 2026, up from $400bn in 2022, according to a new report by Strategy& Middle East, part of the PwC network.

The growth is being driven by strong capital inflows, favourable oil prices, and regulatory reforms. The industry is also benefiting from a growing demand for professional investment advice from individual investors, the report explains.

“This projected growth underscores the potential of the GCC asset management industry amidst global economic challenges,” said Jorge Camarate, partner at Strategy& Middle East, and the leader of the firm’s financial services practice.

“Despite the region’s preference for offshore investing, increasing product sophistication and supportive regulatory initiatives are making onshore investment more appealing.”

Historically, high-net-worth individuals (HNWIs) and family offices have favoured offshore asset management opportunities.

Strategy& Middle East estimates more than 70 per cent of regional private wealth is currently in offshore accounts.

However, the local asset management industry has several tailwinds that are shifting trends.

According to Strategy& Middle East partner Aurélien Vincent strong capital inflows into GCC countries, supported by favourable oil prices and record growth in initial public offerings (IPOs), have been key drivers of growth for the asset management industry.

“As GCC countries continue to diversify their economies and deepen their capital markets, regional investors and institutions will be able to benefit from an expanding range of investment opportunities,” he added.

Despite global market complexities, the GCC asset management industry exhibits robust growth potential, driven by strong capital inflows, favourable oil prices, and substantial trade surpluses.

The IMF estimated in 2022 that GCC countries together held a trade surplus of approximately $350bn. Wealthy individuals are also attracted to the region, with the UAE previously projected to attract the most millionaires worldwide in 2022. Additionally, an increased appetite for IPOs saw the Middle East raise a record amount in proceeds, exceeding $20bn in 2022.

In response to changing market dynamics, individual investors are increasingly seeking professional advice, driving the GCC asset management industry towards more advanced products. This trend, towards meeting sophisticated investor needs, has been facilitated by crucial regulatory initiatives around the region.

“The GCC asset management industry is presented with a unique opportunity for growth,” said Strategy& Middle East manager Dmitry Abramov.

“With the right strategic actions, GCC asset managers can capitalise on the tailwinds to capture new market share, effectively overcoming region-specific challenges and beating competition.”

 

 

Source: https://www.gdnonline.com/Details/1289753/GCC-assets-under-management-to-reach-$500-billion-by-2026

 

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