GCC onshore asset management base to cross $500 billion by 2026

06 September 2023 Consultancy-me.com 2 min. read

Around 70% of regional wealth in the Gulf Cooperation Council (GCC) countries is currently held in offshore accounts, though that may soon change. A new report from strategic consulting firm Strategy& shows how the GCC asset management market is expected to reach nearly $500 billion in onshore assets by 2026.

Despite challenges like high interest rates, fallout from high-profile bank failures, and a general preference for offshore investing, the regional GCC asset management sector is expected to grow significantly from a market size of $400 billion in 2022.

“This projected growth underscores the potential of the GCC asset management industry amidst global economic challenges,” said Jorge Camarate, partner at Strategy&.

GCC onshore asset management base to cross $500 billion by 2026

“Despite the region's preference for offshore investing, increasing product sophistication and supportive regulatory initiatives are making onshore investment more appealing.”

In order to capitalize on the strong regional economic performance, the asset management sector will need to revamp parts of their business models, exploit new digital tools, and explore non-organic growth opportunities, according to the report.

“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. 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,” said Aurélien Vincent, partner at Strategy&.

Another major factor influencing global asset management strategies is the growing importance for ESG investments, which have now become an indispensable component of the overall value proposition. In a separate study, 90% of respondents said they would stop or would consider stopping investing in non-ESG products.