At Insight Discovery, we have been producing our flagship Middle East Investment Panorama (MEIP) report for eight years. We have always sought to answer this question: what do advisers across the Gulf Cooperation Council (GCC) region want from the asset management companies and international life insurance companies with whom they work?
The peculiar nature of the GCC region economies means the advisers are working overwhelmingly with expatriates – and, especially, those from the UK and the Indian sub-continent. This means that we have generally not dealt with two other important questions. One is: what are the opportunities for asset managers from the retirement savings of GCC nationals? The other is: how large are the opportunities from the region’s Sovereign Wealth Funds (SWFs)?
This year, we have worked with Marmore Research to gain a comprehensive view of all the asset pools across the region.
The assets under management (AUM) of the SWFs dwarf all others, at US$2,921bn. Unfortunately, the public finances of most of the GCC governments mean that most of the SWFs – essentially buffers to provide protection against hard times – are growing slowly, if at all.
With AUM of US$411bn, the Defined Benefit (DB) Pension Funds are the second largest pool of assets. Like the SWFs, they hold considerable allocations outside the domestic capital markets of the GCC region. Unlike the SWFs, they are growing steadily, thanks to economic and demographic trends.
Other important pools of assets include State-Owned Enterprises of GCC governments (with AUM of US$124bn), mutual funds (US$25bn) and Private Equity (PE) funds (US$7bn).
The AUM of the region’s insurance companies – at US$85bn – are substantial in absolute terms. In part because nearly half of advisers have been increasing their usage of non-life insurance products for clients, the figure is likely to rise.
Not included in Marmore Research’s analysis are: portfolios of High Net Worth Individuals that are run by/through private banks outside the region; savings held as deposits with GCC region banks by nationals and expatriates; and assets of advisers clients in mutual funds that are domiciled in Luxembourg, Ireland and other centres outside the region.
Insight Discovery’s MEIP report for 2017 can be found here: https://insight-discovery.lastworddigital.com