GCC asset management base grew by 9% to $2.2 trillion last year

The value of assets under management across the Gulf Cooperation Council (GCC) region expanded by 9% to $2.2 trillion in 2024, according to a study by Boston Consulting Group.

Globally, assets under management grew by 12% in 2024 to $128 trillion, with most of that growth attributed to market performance (70% of the total). For the Middle East and Africa, growth ended the year at 10%.

The GCC led MENA’s expansion trajectory, according to Boston Consulting Group due to factors such as sovereign fund strength, expanding retail investment, and strategic diversification. “The region’s 9% growth in assets under management underscores its rising prominence as a hub for institutional and retail capital,” said Lukasz Rey, managing director and partner at Boston Consulting Group (BCG).

Mohammad Khan, managing director and partner at BCG, added: “The GCC’s asset management industry has demonstrated remarkable resilience and strategic growth in 2024. With Saudi Arabia and the UAE driving retail mutual fund expansion and Kuwait and Abu Dhabi leading in sovereign wealth fund dominance, the region is steadily establishing itself as a global financial powerhouse.”

The growth of the GCC highlights that the region is becoming a global financial hub and that asset managers in the Gulf are poised to compete with big global players in the future, the strategy consultancy firm said in its report.

“With Saudi Arabia and the UAE anchoring regional momentum, the GCC’s strategic diversification and sovereign wealth fund dominance signal a future where local asset managers could rival global giants,” said Rey.

Adapting to pressures

Across the board, BCG’s research warned that asset managers will face a number of notable pressures and even disruptions. This includes persistent fee compression, shifts in investor preferences, and digital disruption – all factors which will require asset managers to redesign their business models, accelerate cost innovation, and sharpen their strategic focus.

“The next decade’s leaders will be those who redefine their future, not just endure challenges,” highlighted Khan. “The next decade will be defined by asset managers who prioritize client-centric transformation, technological advancement, and leaner business models.”

Three trends to consider

The report highlights three forces reshaping the industry globally:

1. Opportunities to create new products in response to changing investor demands
Looking forward, asset managers have two opportunities to win in an evolving product and distribution landscape. First, they can claim a larger portion of a shrinking but important pool of actively managed assets – specifically, in active exchange-traded funds (ETFs), model portfolios, and separately managed accounts.

Second, they can mobilize to play a key role in the growing market for delivering private assets to retail clients.

Retail access to private markets is an expanding frontier, with semi-liquid private asset funds expanding over five times in four years, surpassing $300 billion. This growth is fueled by the demand for better risk-adjusted returns and solid long-term performance, though challenges include navigating regulatory barriers, simplifying product design, and enhancing investor education.

2. A need for consolidation and digital transformation
Strategic partnerships and M&A are reshaping the landscape as firms race to gain scale, broaden offerings, and build technology capabilities. Those overseeing the largest amount of assets can drive costs down through technological synergies, streamlined operations, and process efficiencies, while those managing less than $300 billion must emphasize leaner models.

3. A renewed focus on cost
As asset managers emphasize operational efficiency, enhanced decision making, and client engagement, AI has emerged as a key accelerator. GenAI is transforming process automation and product delivery – especially in complex areas such as illiquid and alternative assets – and is now being deployed across the front, middle, and back offices.

Nabil Saadallah, managing director and partner at BCG, stated: “Cost discipline is now a strategic focus, with firms prioritizing unique value creation, embracing lean practices, and investing in transformative technologies.”