Saudi asset management industry hits $266bn, poised for further growth: Fitch Ratings
RIYADH: Saudi Arabia's asset management industry grew by 20 percent year on year in 2024, pushing the sector's total assets to SR1 trillion ($266 billion) for the first time, according to a new analysis by Fitch Ratings.
In its latest report, the ratings agency said the industry is expected to continue attracting steady inflows through 2025 and 2026, with assets under management projected to exceed SR1.3 trillion.
Fitch attributed the sector's momentum to several key factors, including a growing investor base, favorable demographics, ongoing economic reforms, strong capital markets, and digital transformation initiatives.
Bashar Al-Natoor, global head of Islamic Finance at Fitch, said: 'Saudi Arabia's asset management industry is the largest in the GCC (Gulf Cooperation Council) with AUM having crossed SAR1 trillion, and further growth expected.'
He added: 'Almost all mutual funds listed on the Saudi Exchange are Shariah-compliant, indicating strong demand for Islamic products.'
An earlier report by Fitch in October noted that growth in 2025 would be further supported by a rising number of high-net-worth individuals seeking asset management services within the Kingdom.
The Saudi government aims for the industry's AUM to reach 40 percent of the Kingdom's gross domestic product by the end of the decade.
The report also noted that bank-affiliated asset managers in Saudi Arabia accounted for nearly two-thirds of the industry's revenues by the end of 2024.
However, Fitch pointed out that international competition is likely to intensify as global players such as BlackRock, Goldman Sachs, and Morgan Stanley, as well as Citigroup and Mizuho Bank, have received regulatory approval to establish regional headquarters in the Kingdom.
The analysis highlighted that around half of Saudi Arabia's AUM is held in private funds, followed by discretionary portfolio management and public funds.
Private fund assets are primarily concentrated in real estate and equities, while half of the AUM under discretionary portfolio management is invested in local shares.
Public fund assets are distributed across money market funds, equities, real estate investment trusts, and debt instruments.
Fitch also noted that the combined market capitalization of listed equity markets in the GCC surpassed $4 trillion at the end of 2024, led by the Saudi Exchange.
Despite the strong outlook, the report warned of potential challenges, including trade tensions and fluctuations in oil prices.
'The market is not immune from global volatilities, such as those caused by the US government's tariff rises on April 2. Oil price changes are among the key factors that could affect the industry,' Fitch added.
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