Middle East's AuM declines in 2015, says BCG study

Markus Massi

The global growth of asset management stalled as the industry in 2015 recorded its worst year since the 2008 financial crisis, according to a report by the Boston Consulting Group (BCG).
Growth in assets under management (AuM) stalled — or in the case of the Middle East declined 10 percent — and net new flows of assets, revenue growth, and revenue margins all dipped lower in 2015, according to Global Asset Management 2016: Doubling Down on Data.
BCG’s fourteenth annual benchmark report on the industry has just been released.
Asset managers' future prosperity and competitive advantage will require them to shift from outdated product strategies and develop disruptive investment capabilities using leading-edge data and analytics, the report emphasizes.
BCG reports that the global value of AuM rose just one percent in 2015, to $71.4 trillion from $70.5 trillion in 2014, after growing eight percent that year, and at an average annualized rate of five percent from 2008 through 2014.
“Weak and turbulent global financial markets are today’s reality - one recent example being the market response to Britain’s Brexit vote to leave the EU,” said Ihab Khalil, a partner and MD at BCG Middle East.
The industry’s regional growth, as measured by AuM, reflected in large part the performance of capital markets by region in 2015.
AuM decreased in North America and the Middle East but rose elsewhere. Growth was modest in Europe and strong in Latin America and Asia, excluding Japan and Australia. The 10 percent growth of AuM in Asia, excluding Japan and Australia, was relatively robust, but once again, it trailed the rapid expansion of the region’s private wealth.
“The lack of market growth in 2015 reinforces the urgency faced by managers to pursue a step change in capabilities,” explained Markus Massi, partner and MD of BCG Middle East’s financial services practice and leader of the asset management topic.”