-
The AuM growth in the region is primarily attributed to an increase in SWF assets
-
Retail mutual funds witnessed 12 per cent growth during 2020
The size of the Middle East’s asset management industry grew 11 per cent from 1.1 trillion of Assets Under Management (AuM) in 2019 to $1,2 trillion in 2020, according to a latest Boston Consulting Group (BCG) report.
“Much like every sector, the resilience of the asset management industry was tested in 2020, with initial outbreak disruption and subsequent economic tailwinds presenting a period of sizeable uncertainty for the industry and its incumbents,” said Harold Haddad, Managing Director and Partner, BCG.
“However, the Middle East has prevailed in the face of adversity, and it is now apparent that the region has entered 2021 in a position of strength following healthy returns.”
The ‘Global Asset Management 2021: The $100 Trillion Machine’ report finds that the AuM growth in the region is primarily attributed to an increase in Sovereign Wealth Funds (SWF) assets, mostly due to strong capital market performances.
Many SWFs had high equity exposure in developing and emerging markets, faring well as the financial landscape regained a degree of pre-pandemic stability. Furthermore, another main driver of AuM growth was retail investors.
In the Middle East, retail mutual funds had 12 per cent growth during 2020, with strong global market performance instigating this outcome.
The 19th annual BCG study of the global asset management industry explores the extent of growth that other markets have accumulated during challenging conditions, showcasing key drivers while providing comprehensive explanations.
At the global level, net inflows for the asset management industry reached $2.8 trillion in 2020, or 3.1 per cent of the total AuM at the beginning of the year – compared to a historical average between 1-2 per cent over the previous decade. Again, retail investors proved to be the main driver behind AuM growth. Global retail AuM portfolios grew globally by 11 per cent in 2020, representing 41 per cent of global assets at $42 trillion. Institutional investments also grew at a similar pace to reach $61 trillion, or 59 per cent of the global market.