Islamic Finance

Assets under management in Middle East rose 11% to $1.2trln in 2020

Assets under management in Middle East rose 11% to $1.2trln in 2020

Despite the economic turbulence caused by the coronavirus pandemic, the asset management industry in the Middle East has grown by 11 percent to $1.2 trillion in 2020 from $1.1 trillion in 2019, driven by the assets of sovereign wealth funds, a new report by Boston Consulting Group (BCG) said.

In the report titled ‘Global Asset Management 2021: The $100 Trillion Machine,’ BCG said another main driver of AuM growth was retail investors.

Many SWFs had high equity exposure in developing and emerging markets, faring well as the financial landscape regained a degree of pre-pandemic stability. In addition, retail mutual funds in the region saw 12 percent growth during 2020, with strong global market performance instigating this outcome.

“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.”

Meanwhile at the global level, net inflows for the asset management industry reached $2.8 trillion in 2020, or 3.1 percent of the total AuM at the beginning of the year – compared to a historical average between 1-2 percent over the previous decade, the report said.

Again, retail investors proved to be the main driver behind AuM growth. Global retail AuM portfolios grew globally by 11 percent in 2020, representing 41 percent of global assets at $42 trillion. Institutional investments also grew at a similar pace to reach $61 trillion, or 59 percent of the global market.

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