Dubai, UAE — Assets under management (AuM) across the Gulf Cooperation Council (GCC) rose 10% in 2025 to $2.7 trillion, marking one of the industry’s strongest annual performances in more than a decade, according to a report by Boston Consulting Group (BCG).
The consultancy’s Global Asset Management Report 2026: An Imperative for Growth found the region’s retail asset management business expanded faster than institutional assets, even as institutional investors continued to account for the overwhelming majority of assets under management.
Retail assets grew 14% during 2025, compared with 9% growth for institutional assets. Institutional investors account for 93% of regional assets under management, while retail assets represent 7% of the total market.
The report said the regional industry is entering a more competitive phase in which distribution capabilities and technology investment are becoming increasingly important differentiators.
Saudi Arabia leads regional market
Saudi Arabia continued to underpin regional growth, holding the largest share of retail mutual funds and exchange-traded funds across both the GCC and the broader Middle East, followed by the United Arab Emirates and Kuwait.
Among institutional investors, Saudi Arabia’s General Organization for Social Insurance Public Pension Agency (GOSI-PPA) remained the region’s largest pension fund, while Kuwait’s WAFRA retained its position as the second largest.
Among sovereign wealth funds, the Kuwait Investment Authority reported the largest externally managed assets under management, ahead of the Abu Dhabi Investment Authority.
“The GCC asset management industry is at an inflection point that demands a fundamentally different approach to competition,” said Lukasz Rey, Managing Director & Partner and Middle East Head of Financial Institutions at BCG.
“While near-term dynamics will depend on the broader market environment, the region’s structural fundamentals remain compelling, and many asset managers continue to view the GCC as a strategic priority.”
Rey said firms investing in distribution capabilities and technological transformation would be best positioned to navigate uncertainty and capture future opportunities.
Distribution becomes a competitive battleground
Beyond regional performance, BCG said structural changes are reshaping the global asset management industry.
The report argues that distribution is replacing product manufacturing as the industry’s primary competitive advantage as investment products become increasingly commoditised.
Control of distribution channels—including investment platforms, financial advisers and institutional relationships—is becoming the principal determinant of future growth, the consultancy said.
Globally, BCG found revenue growth is becoming increasingly detached from asset growth as management fees decline, while higher technology spending offsets traditional economies of scale.
Together, those trends are creating a more competitive environment in which only a limited number of firms are positioned to capture disproportionate growth.
AI expected to reshape operating models
Artificial intelligence is accelerating those structural shifts by allowing firms to expand research, improve client coverage and reduce operating costs, according to the report.
BCG estimates global asset managers could reduce costs by 25% to 35% over the next three to five years while increasing research coverage two- to five-fold and client coverage per relationship manager by three- to five-fold through AI-enabled operating models.
However, the consultancy said most firms remain in the early stages of AI adoption, focusing on pilot programmes rather than full operational transformation.
“Middle East asset managers have an opportunity to leapfrog traditional operating models by embedding AI and digital capabilities into their core operations,” said Mohammad Khan, Managing Director & Partner at BCG.
“While the path forward will require navigating evolving market conditions, firms that move strategically to build scalable distribution networks and technology-enabled platforms will be well positioned to shape the next era of regional asset management.”
Tokenization emerges as another disruptive force
Alongside artificial intelligence, BCG identified tokenization and digital assets as emerging trends with the potential to reshape the industry’s structure.
The report projects the value of tokenized real-world assets will reach $14 trillion by 2030 and $55 trillion by 2035, creating new channels for ownership, product design and distribution.
According to BCG, those developments could alter how assets are accessed, transferred and managed while lowering traditional barriers linked to scale and distribution.
“The convergence of tokenization, AI, and evolving investor expectations is reshaping the competitive landscape in ways that favor agility over incumbency,” said Nabil Saadallah, Managing Director & Partner at BCG.
“For asset managers in the GCC, success will increasingly hinge on their ability to deliver personalized solutions at scale; those who embrace this shift stand to unlock significant value in a rapidly transforming market.”
BCG concluded that as market-driven growth gives way to competition-driven growth, firms’ ability to attract net inflows, strengthen distribution networks and embed technology into core operations will increasingly determine long-term success.
