The asset management sector in the GCC is experiencing significant growth, with assets under management (AuM) reaching $2.2 trillion in 2024, marking a 9% increase from the year before, as reported by Boston Consulting Group (BCG).
This growth is largely driven by sovereign wealth funds (SWFs), the expansion of retail mutual funds in Saudi Arabia and the UAE, and a swift shift towards digital innovation.
This regional progress is occurring amidst global market fluctuations, fee pressures, and changing investor preferences. Experts suggest that the GCC has secured a unique position, with sovereign wealth funds offering stability and retail involvement adding depth. “The next leaders will be those who redefine the future, not just endure challenges,” stated Lukasz Rey, managing director and partner at BCG and head of financial institutions for the Middle East. “With Saudi Arabia and the UAE leading regional growth, the GCC’s strategic diversification and SWF dominance highlight a future where local asset managers could compete with global giants.”
Saudi Arabia and the UAE are central to this expansion, contributing significantly to retail mutual fund growth. Saudi Arabia’s Capital Market Authority has implemented reforms to enhance liquidity and strengthen the investment climate, while the UAE has seen substantial fund inflows linked to its booming capital markets, such as Dubai’s IPO surge and Abu Dhabi’s ADX expansion. Kuwait and Abu Dhabi continue to be key players in sovereign wealth, led by the Kuwait Investment Authority and the Abu Dhabi Investment Authority, some of the largest sovereign funds globally. Collectively, GCC SWFs manage over $4 trillion in assets, with a growing focus on alternative investments and sustainable finance.
Analysts note that the GCC’s 9% AuM growth in 2024 surpasses the global average of 7%. This rise is mostly due to market performance instead of fresh inflows, highlighting the region’s vulnerability to global equity fluctuations. Nonetheless, experts maintain that the structural growth story remains intact. “Saudi Arabia and the UAE are spearheading retail mutual fund growth, while Kuwait and Abu Dhabi lead in sovereign wealth fund dominance,” said Mohammad Khan, managing director and partner at BCG. “The region is establishing itself firmly as a global financial hub.”
A notable trend is the increasing interest in private assets, traditionally dominated by institutions but now attracting retail investors. Globally, semi-liquid private funds have grown fivefold in four years, exceeding $300 billion, with GCC investors increasingly participating. In Saudi Arabia, the Public Investment Fund (PIF) is a catalyst, investing in domestic infrastructure and technology and internationally. Similarly, Mubadala and ADQ in Abu Dhabi are active in renewable energy, life sciences, and advanced manufacturing, aligning with their national diversification goals.
Experts believe that future growth will depend on the sector’s adaptability to three global forces: evolving investor demands, consolidation, and digital disruption. On the demand side, active ETFs, model portfolios, and separately managed accounts are emerging as opportunities. Consolidation is already underway, with larger firms expanding offerings and reducing costs through scale. Smaller firms are adopting niche strategies and lean models to remain competitive.
Technology is a transformative force, with asset managers investing in AI, especially generative AI, to automate portfolio management, enhance research, and streamline operations. “Cost discipline is now a strategic focus, with firms prioritizing unique value creation, lean practices, and transformative tech investments,” said Nabil Saadallah, managing director and partner at BCG.
Industry insiders highlight how pension and sovereign wealth funds are “quietly reshaping the region’s financial architecture” by becoming more active and sophisticated. Saudi pension funds, for instance, are diversifying from traditional fixed income into equities, private markets, and global infrastructure. This not only supports the local economy but also integrates the GCC more deeply into global capital flows.
The GCC’s rise as an asset management hub mirrors broader economic reforms. Saudi Arabia’s Vision 2030 has driven capital market development and foreign investment, while the UAE has emerged as a global fintech and investment hub with innovative regulations and attractive zones like DIFC and ADGM. The IMF projects non-oil GDP growth in the GCC at 4.3% in 2025, reinforcing the link between economic diversification and capital market vitality.
Nonetheless, the industry faces challenges. Fee pressures continue to squeeze margins, prompting managers to rethink value propositions. Global investors are increasingly seeking sustainable and ESG-focused products, an area where GCC managers are beginning to respond, particularly in renewable energy funds. Moreover, global market volatility — from US rate uncertainty to China’s slowing growth — could impact inflows and performance.
Despite these challenges, the outlook remains positive. According to Preqin, private market assets under management globally are expected to reach $24 trillion by 2028, and the GCC is positioning to capture a significant share of this growth. Regional SWFs are already among the most active in private equity, venture capital, and infrastructure, while retail investors are increasingly attracted to professionally managed products.
In a region once reliant on hydrocarbons, the emergence of a $2.2 trillion asset management sector signifies both resilience and reinvention. As BCG’s Rey noted, “The GCC has the ingredients — sovereign fund strength, retail momentum, and diversification strategies — to not only withstand global market volatility but to emerge as a formidable competitor to the world’s leading asset managers in the coming decade.”
