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Saudi Arabia’s assets under management (AUM) have posted a double-digit growth and are poised to expand further by around $50 billion over the short term on the back of new regulatory reforms and growing equity and debt capital markets.
The total value of AUM in the kingdom exceeded $250 billion at the end of the first half of 2024, rising by 13.5% from a year ago, Fitch Ratings said in a report on Tuesday.
Within a couple of years, the value of AUM could hit $300 billion, driven by Saudi’s diversification efforts.
“We expect Saudi Arabian AUM to cross $300 billion within a couple of years, driven by Vision 2030’s Financial Sector Development Program,” said Bashar Al Natoor, Global Head of Islamic Finance at Fitch Ratings.
The Gulf state has the largest asset management industry (AMI) in the GCC region. As the industry matures, it could attract funds that were placed with offshore asset managers, the ratings agency said.
As of 2023, the industry’s AUM accounted for 22% of the gross domestic product (GDP), with private funds three times larger than public funds, Al Natoor noted.
The value of private funds’ AUM has also doubled since 2020, with the majority equities (43%) and real estate (40.5%). About a third (28%) of public funds were in money markets, followed by equities (25.6%), REITs (18.7%) and debt (16%).
Higher IPO activity in Saudi Arabia and uptick in the Tadawul All-Share Index performance are also attracting equity funds. The Saudi Stock Exchange (Tadawul) is the largest bourse in the GCC and the world’s tenth-largest, Fitch noted.
(Writing by Cleofe Maceda; editing by Seban Scaria)
