Middle East assets under management grew by $100bln in 2022: BCG

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However, asset managers need to reassess their operations to sustain the level of profitability

Zawya – Middle Eastern assets under management (AuM) grew by a $100 billion from 2021 to 2022 to reach $1.3 trillion, a 7% CAGR, according to a new report from Boston Consulting Group (BCG).

However, BCG’s report “Global Asset Management 2023: The Tide Has Turned,” notes that to get back to historical levels of profitability and growth, asset managers in the Middle East need to reassess their operations.

“In fact, since 2006, 90% of revenue growth came from market performance, and in an environment where this is no longer guaranteed, it is now time for a real transformation,” said Markus Massi, Managing Director and Senior Partner, at BCG.

With central banks across the globe trying to slow growth to combat inflation, there will be an impact on equity markets.

“However, for the Middle East, the growth outlook is more positive driven by continued higher oil income and comparatively positive equity market developments,” said Massi.

To get back to historical levels, asset managers will need to cut costs by 20% overall and shift their revenue mix to generate at least 30% of their revenue from higher-margin products, BCG noted.

Image by: Getty Images (Zawya)

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Edmund Shing, PhD

Global Chief Investment Officer
BNP Paribas Wealth Management

Edmund has over 29 years of experience in financial markets in a wide variety of positions, ranging from proprietary trading to portfolio manager in a number of financial institutions in London and Paris.  He previously held the role of Global Head of Equity and Derivative Strategy at BNP Paribas in London from 2015 to 2020, and has been Chief Investment Officer at BNP Paribas Wealth Management since November 2020.

Edmund is responsible for piloting our investment strategy and will continues to rollout out recommendations and themes with actionable advice that brings our expertise to our clients and support to our client-facing teams.  In this time of change, his expertise in following and anticipating markets is a true value added for both our customers and those at Wealth Management who serve them.

Edmund has a PhD in Cognitive and Computing Science from the University of Birmingham in the United Kingdom, and has done advanced studies in Knowledge-Based Systems and in Experimental Psychology.  He is an EFFAS-certified financial analyst. He has also authored the book “The Idle Investor” published by Harriman House in 2015, proposing 3 simple investment strategies that take only a few minutes to execute per month.

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