GCC asset management hits $2.2tn in 2024 as Saudi Arabia, UAE drive growth

Arab News

20 hours ago

RIYADH: The Gulf Cooperation Council's asset management industry grew to $2.2 trillion in assets under management in 2024, up 9 percent from 2023, according to Boston Consulting Group.
BCG's Global Asset Management report, 'From Recovery to Reinvention,' identified Saudi Arabia and the UAE as key drivers of retail mutual fund growth, while Kuwait and Abu Dhabi's sovereign wealth funds held the largest share of regional assets.
The GCC sector is in a strong growth phase, underpinned by sovereign fund strength, expanding retail investment, and strategic diversification. BCG notes the region is navigating global market volatility while positioning itself to compete with the world's leading asset managers.
'The next decade's leaders will be those who redefine their future, not just endure challenges. The region's 9 percent AuM growth in 2024 underscores its rising prominence as a hub for institutional and retail capital,' said Lukasz Rey, managing director and partner and Middle East head of financial institutions at BCG.
He added: 'With Saudi Arabia and the UAE anchoring regional momentum, the GCC's strategic diversification and SWF dominance signal a future where local asset managers could rival global giants.'
Rey noted that recent market volatility presents an opportunity for transformation, prompting asset managers to rethink value delivery, client engagement, and operational strategies.
The report found that 2024 revenue growth was largely driven by market performance rather than new investor inflows, highlighting the sector's sensitivity to external forces. Ongoing fee pressure, shifting investor preferences, and digital disruption are pushing firms to revamp business models, prioritize cost efficiency, and refine strategic focus.
Mohammad Khan, managing director and partner at BCG, emphasized that the region is steadily establishing itself as a global financial powerhouse.
'Saudi Arabia and the UAE are driving retail mutual fund expansion, while Kuwait and Abu Dhabi lead in sovereign wealth fund dominance,' he said.
The report highlights three global forces shaping the asset management sector. First, there is growing opportunity to develop new products in response to evolving investor demands, including active exchange-traded funds, model portfolios, and separately managed accounts.
Retail interest in private assets is also surging, with semi-liquid private funds growing more than fivefold in four years to surpass $300 billion.
Second, consolidation and digital transformation are reshaping the industry. Firms are pursuing scale, expanding offerings, and investing in technology.
Larger players can cut costs through tech partnerships, while smaller firms are adopting leaner business models to remain competitive.
Finally, a renewed focus on cost efficiency is driving adoption of artificial intelligence — particularly generative AI — to automate processes and enhance performance across front, middle, and back-office operations.
'Pension funds and SWFs, led by Saudi and Kuwaiti institutions, are quietly reshaping the region's financial architecture,' said Nabil Saadallah, managing director and partner at BCG.
He added: 'Cost discipline is now a strategic focus, with firms prioritizing unique value creation, embracing lean practices, and investing in transformative technologies.'