Wealth funds drive Mideast AuM sector to $1.2trillion

Dubai - In the GCC, the $260 billion AuM industry is set to grow at a steady pace over the next decade.

Driven by sovereign wealth funds, assets under management (AuM) in the Middle East have witnessed double-digit growth despite the turbulent times, increasing by 11 per cent to $ 1.2 trillion in 2020 from $1.1 trillion in 2019, according to Boston Consulting Group.

Apart from the region’s sovereign wealth funds, retail mutual funds’ assets were fundamental to this surge in AuM, with further growth opportunities likely as markets emerge from economic difficulties, BCG said in a report.

Despite the unprecedented turbulence of late, the asset management industry in the Middle East has emerged in a favourable position, said the report, titled “Global asset management 2021: The $100 trillion machine".

“Much like every sector, the resilience of the asset management industry was tested in 2020, with initial outbreak disruption and subsequent economic tailwinds presenting a period of sizeable uncertainty for the industry and its incumbents,” said Harold Haddad, managing director and Partner, Boston Consulting Group.

In the GCC, the $260 billion AuM industry is set to grow at a steady pace over the next decade, as regional governments overhaul their hydrocarbon-dependent economies and ease regulations to attract foreign investors, Moody's Investors Service said in its latest report.

Saudi Arabia, the biggest Arab economy and Opec’s top oil exporter, accounted for slightly less than half of the regional assets, followed by Kuwait, Bahrain, the UAE, Qatar and Oman. Of the total assets managed in the region, around $200 billion is invested through managed accounts and the rest through collective investment vehicles that pool investors’ accounts, according to Moody’s estimates.