The 9 per cent rise in AuM last year came largely from rising markets rather than inflows, suggesting that the local asset management sector must take a hard look at its business model, among other features, the BCG report said.

The Gulf Cooperation Council group of countries’ asset management industry had total AuM of $2.2 trillion as of the end of 2024, rising 9 per cent on a year ago, with Saudi Arabia and the UAE being the main contributors.

The largest blocks of assets are run by sovereign wealth funds. Kuwait and Abu Dhabi provide the largest SWF players, according to a report from Boston Consulting Group. The GCC countries are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

"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," Lukasz Rey (pictured below), managing director and partner and Middle East head of financial institutions at BCG, said. 

Lukasz Rey 

The rise of the GCC region as a wealth management space, complementing and sometimes rivalling centres such as London, Singapore and Switzerland, has been widely chronicled. Dubai, to give one example, has been particularly keen to promote its credentials.

The BCG report warned that GCC countries cannot afford to be complacent. Revenue growth in 2024 was driven by market performance rather than investor inflows, it said.

Cost control is also important, it said, helping to put a focus on AI and its potential for driving efficiency gains. Generative AI is “transforming process automation and product delivery – especially in complex areas such as illiquid and alternative assets – and is now being deployed across the front, middle, and back offices,” it said.

“Notably, cost discipline is now a strategic focus with firms prioritising unique value creation, embracing lean practices, and investing heavily in transformative technologies," Nabil Saadallah, managing director and partner at BCG, said. 

BCG said asset managers have two opportunities to win in an evolving product and distribution landscape. First, they can claim a larger portion of a shrinking but important pool of actively managed assets – specifically, in active exchange-traded funds, model portfolios, and separately managed accounts. Second, they can mobilise to play a key role in the growing market for delivering private assets to retail clients.  

Strategic partnerships and M&A are reshaping the landscape as firms race to gain scale, broaden offerings, and build technology capabilities, it said. “Those overseeing the largest amount of assets can drive costs down through technological synergies, streamlined operations, and process efficiencies, while those managing less than $300 billion must emphasise leaner models,” it said. 

The UAE and associated region is still some way down the international rankings in terms of being host to the world’s largest cross-border centres of wealth.