MENA Asset Management Survey 2012 - National Bank of Abu Dhabi

Middle East & North Africa
Focus: Fund Management in the Middle
East
Chirag Shah – Head of Strategy and
Corporate Development –
Dubai International Financial Centre
Authority
Historically, high oil prices have led to an
accumulation of wealth within the Middle
East. For a long time, this wealth was
managed by wealth managers based in
jurisdictions such as London, New York
and Geneva.
The penetration of the fund management
industry is still low in the Middle East,
when compared to international markets.
Mutual funds’ Assets Under Management
(AUM) is around 2.5% of market capitalisation, which underlines the opportunity for
growth since similar indicators in developed markets lie above the mid-way mark; with
the growing knowledge and sophistication of the industry, huge potential is available to
both international and local players. In the last decade AUM in the MENA region has
tripled and the number of fund managers has quadrupled, demonstrating the rapid
growth in this segment. The need for infrastructure development in the ME in areas such
as transportation, logistics, education and health is expected to create investment
opportunities in such a booming market.
Unsurprisingly, the MENA region experienced the highest growth in asset pools globally
to reach USD 1.9 trillion in 2010. This has attracted increasing numbers of international
players into the region. These have been either through directly establishing subsidiaries
in the Middle East or representative offices to conduct initial marketing and development
activity. Many firms have also worked with regional players to collaborate on sharing best
practices in return for local market understanding and distribution networks.
It is common knowledge that the MENA region is home to 9 of the top 20 SWFs in the
world, with assets totaling around USD 2 trillion. This has created many opportunities,
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