Global assets under management (AuM) will rise to around $101.7 trillion by 2020, from a 2012 total of $63.9 trillion, predicts a PwC report titled Asset Management 2020: A Brave New World.
This represents a compound annual growth rate (CAGR) of nearly 6%.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The report also finds that assets under management in the SAAAME (South America, Asia, Africa, Middle East) economies are set to grow faster than in the developed world in the years leading up to 2020, creating new pools of assets that can potentially be tapped by the asset management (AM) industry.
However, the majority of assets will still be concentrated in the US and Europe.
PwC predicts that assets under management (AuM) in the Middle East and Africa will rise to $1.5 trillion by 2020, from a 2012 total of $0.6 trillion. This represents a CAGR of nearly 12%.
AuM (assets under management) growth in the Middle East will be mainly driven by positive economic outlook, family businesses & entrepreneurship and the population demographics:
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData– Diversifying economies, great investment opportunities and favourable regulation complemented by highlight events, Dubai Expo 2020 and Qatar FIFA World Cup 2022, will attract the capital inflow into the region.
– Family businesses in the ME (Middle East) are very powerful and influential, unlike other economies, 75% of the private sector activity is controlled by family businesses. The younger generation of these families consider themselves entrepreneurs as well as people who run SMEs.
– The overall population in the ME is young; with most people in their mid-career and more people entering employment than retiring shows the strong potential of pension fund growth.
Penetration of the AM industry in MENA is still low compared to global markets; mutual funds under management in 2012 was around 2.5% of market capitalization hence there is huge potential available to local and international players.
It is worth identifying that MENA based high net worth individuals (HNWI) are moving their wealth back from developed markets to the region; AMs and private banks have doubled their share of assets in the past decade.
Furthermore, PwC has seen interest from foreign private banks to set-up operations in the GCC following strong economic fundamentals.
PwC Middle East financial services leader Graham Hayward said, "Amid unprecedented economic turmoil and regulatory change, most asset managers have not had time to bring the future into focus. But the industry stands on the precipice of a number of fundamental shifts that will shape the future of the asset management industry.
"Strong branding and investor trust in 2020 will only be achieved by those firms that avoid making mistakes that attract the ire of investors, regulators and policymakers. Asset managers must deliver the clear message that they deliver a positive social impact to investors and policymakers. The efforts required to satisfy investors and policymakers cannot be left to others.
"The coming years will bring the industry higher volumes of assets than ever before which places more responsibility on firms to manage these assets to the best of their collective ability. Asset managers must clearly outline the value they bring to customers while being fully transparent over fees and costs."
