GCC Asset Management Market May Reach $500 Billion by 2026

The asset management market in the GCC (Gulf Cooperation Council) is expected to grow to nearly $500 billion by 2026, according to a study by Strategy& Middle East. 

This is an increase from $400 billion at the end of 2022. The growth is driven by factors such as strong capital inflows, favorable oil prices, and substantial trade surpluses in the region.

Currently, more than 70% of the GCC’s private wealth is held in offshore accounts. However, increasing product sophistication and supportive regulatory initiatives are making onshore investment more appealing. This is leading to a shift in trends and an increase in onshore assets.

The GCC countries have a trade surplus of approximately $350 billion, according to the IMF. The region is also attracting wealthy individuals, with the UAE projected to attract the most millionaires worldwide in 2022. 

Additionally, there is an increased appetite for initial public offerings (IPOs) in the Middle East, with the region raising a record amount of over $20 billion in proceeds in 2022.

The Middle East is home to a large number of ultra-wealthy families, entrepreneurs, and royals. The UAE is expected to lead the world in attracting private wealth to its economy over the next five years, with an estimated 4,000 millionaires.

The asset management industry in the UAE is expected to experience significant growth in the coming years. 

It is estimated that the assets under management will grow at an annual rate of 10.59% from 2023 to 2027, reaching a market volume of $358.10 billion by 2027.

The growth in the industry is being driven by strong capital inflows into GCC countries, supported by favorable oil prices and a record number of initial public offerings. 

As the GCC countries continue to diversify their economies and develop their capital markets, there will be more investment opportunities for regional investors and institutions.

To take advantage of this growth opportunity, asset managers in the GCC should consider strategic actions such as acquiring mid-sized independent firms or forming partnerships. 

By employing the right strategies, asset managers can overcome challenges specific to the region and gain new market share.

The changing market dynamics have also led to an increased demand for professional advice from individual investors. 

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This has prompted the asset management industry to offer more advanced products to meet the needs of sophisticated investors. Regulatory initiatives in the region have also facilitated this trend.