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Middle East AUM rises by 11% to reach $1.2 tn in 2020

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A report by Boston Consulting Group mentioned that the sector grew to $1.2 tn in 2020 from $1.1 tn in 2019

Amid the pandemic, the asset management industry in the Middle East managed to stay afloat and grew by 11 percent to $1.2 trillion in 2020 from $1.1 trillion in 2019, as mentioned in the report by Boston Consulting Group (BCG).

The report also mentioned that the primary reason behind the growth despite the crippling economic conditions was primarily due to sovereign wealth funds and retail investors.

Titled ‘Global Asset Management 2021: The $100 Trillion Machine’, the report mentioned that many sovereign wealth funds had high equity exposure in developing and emerging markets, which performed well as the financial sector started getting back on its feet. Additionally, retail mutual funds in the region grew by 12 percent in 2020 aided by the strong global market performance bringing this outcome.

Harold Haddad, Managing Director and Partner, BCG told the media, “Much like every sector, the resilience of the asset management industry was tested in 2020, with initial outbreak disruption and subsequent economic tailwinds presenting a period of sizeable uncertainty for the industry and its incumbents. However, the Middle East has prevailed in the face of adversity, and it is now apparent that the region has entered 2021 in a position of strength following healthy returns.”

The report also mentioned that globally, the net flow of asset management has reached $2.8 trillion in 2020 or by 3.1 percent, compared to the average 1-2 percent in the last decade.

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