Saudi Arabia and the UAE were the key growth engines in the retail mutual fund sector, while Kuwait and Abu Dhabi’s sovereign wealth funds (SWFs) managed the largest asset volumes in the region.
Lukasz Rey, Managing Director and Partner and Middle East Head of Financial Institutions at BCG, said: “The next decade’s leaders will be those who redefine their future, not just endure challenges. The region’s 9 per cent AuM growth in 2024 underscores its rising prominence as a hub for institutional and retail capital.
“With Saudi Arabia and the UAE anchoring regional momentum, the GCC’s strategic diversification and SWF dominance signal a future where local asset managers could rival global giants.
“Recent market volatility offers a chance for change, prompting asset managers to move from recovery to innovation – reimagining value delivery, client engagement, and business operations.”
Asset management in UAE and Saudi
BCG’s findings show that revenue growth in 2024 was driven primarily by market performance rather than fresh inflows, leaving the sector exposed to global volatility.
Fee compression, shifting investor preferences, and rapid digital disruption are now pushing firms to overhaul business models, cut costs, and adopt technology-led strategies.
The report identifies three forces transforming the global and regional asset management industry:
- Product innovation and retail access to private assets: Asset managers are targeting new opportunities in active exchange-traded funds (ETFs), model portfolios, and separately managed accounts. A major growth area is retail access to private markets, where semi-liquid private asset funds have grown more than fivefold in four years to over $300bn
- Consolidation and digital transformation: Mergers, acquisitions, and strategic partnerships are accelerating as firms scale operations and invest in technology. Managers with more than $300bn in AuM are leveraging efficiencies, while smaller players are adopting leaner operating models
- Cost discipline and AI adoption: Generative AI is being deployed across the front, middle, and back offices, streamlining processes and enabling more efficient management of complex asset classes like alternatives and illiquids
Mohammad Khan, Managing Director and Partner at BCG, said: “The GCC’s asset management industry has demonstrated remarkable resilience and strategic growth, achieving $2.2tn in Assets Under Management (AuM) in 2024.
“With Saudi Arabia and the UAE driving retail mutual fund expansion and Kuwait and Abu Dhabi leading in sovereign wealth fund dominance, the region is steadily establishing itself as a global financial powerhouse.
“As highlighted in BCG’s research, this growth reflects not only recovery but a strategic pivot towards innovation and operational excellence.
“The next decade will be defined by asset managers who prioritise client-centric transformation, technological advancement, and leaner business models, positioning the GCC as a formidable force capable of rivalling global industry leaders.”
Nabil Saadallah, Managing Director and Partner at BCG, said: “While currency adjustments and methodology revisions cloud historical comparisons, the consistency of 9 per cent annual growth across the region and GCC reveals a resilient market.
“Pension funds and SWFs, led by Saudi and Kuwaiti institutions, are quietly reshaping the region’s financial architecture, blending tradition with global asset management rigor.
“Notably, cost discipline is now a strategic focus with firms prioritizing unique value creation, embracing lean practices, and investing heavily in transformative technologies.”
