https://arab.news/mhdyb
RIYADH: The Gulf Cooperation Council’s asset management market is on track to grow above the global average and potentially reach $500 billion by 2026, according to a new report.
Launched by global consulting firm Strategy& Middle East, the report indicated that the projected figure reflects a $100 billion surge in the market size, compared to the $400 billion recorded at the end of 2022.
“This projected growth underscores the potential of the GCC asset management industry amidst global economic challenges,” said Jorge Camarate, leader of the firm’s financial services practice and partner at Strategy& Middle East.
He added: “Despite the region’s preference for offshore investing, increasing product sophistication and supportive regulatory initiatives are making onshore investment more appealing.”
The report further showed that over 70 percent of regional private wealth is in offshore accounts.
Meanwhile, the domestic asset management industry is witnessing several factors and events that contribute to an overall shift in trends.
Driven by robust capital inflows, favorable oil prices, and significant trade surpluses, the GCC asset management industry demonstrates strong growth potential in the face of global market intricacies, the report highlighted.
“Strong capital inflows into GCC countries, supported by favorable oil prices and record growth in initial public offerings, have been critical growth drivers for the asset management industry,” Partner at Strategy& Middle East Aurélien Vincent explained.
He added: “As GCC countries continue to diversify their economies and deepen their capital markets, regional investors and institutions are poised to benefit from an expanding array of investment avenues and opportunities.”
The report also outlined six strategic actions that GCC asset managers can take to leverage these positive trends and tackle challenges unique to the region. These actions encompass enhancing the performance track record, developing operating models and value propositions tailored to specific segments, and establishing efficient sales functions.
Additionally, the recommendations involve revamping the product range, exploiting digital tools, and exploring opportunities for non-organic growth.
“The GCC asset management industry is presented with a unique opportunity for growth,” Manager at Strategy& Middle East Dmitry Abramov stressed.
“With the right strategic actions, GCC asset managers can capitalize on tailwinds to capture new market share, effectively overcoming region-specific challenges,” he concluded.