The strong performance of sovereign wealth funds helped the Mena asset management sector grow its assets under management (AUM) by 11% in 2020.
A report by Boston Group Consulting Group (BCG) showed that AUM in the region increased from US$1.1 trillion to $1.2 trillion last year.
This increase was in spite of the global pandemic. Global markets and oil prices both recovered from steep declines in the first half of the year. And emerging markets equities fared well benefitting the large number of Mena-based wealth funds invested in the asset class.
Notably, some of the largest wealth funds in the region, such as Saudi’s Public Investment Fund (PIF) and Abu Dhabi-based Mubadala, embarked on a spending spree in mid-2020, buying up assets in distressed markets as well as technology and healthcare.
Mubadala’s AUM grew by 5% in 2020, from Dh853 billion ($232 billion) in 2019 to Dh894bn ($243 billion).
An additional factor, according to the report, was the strong demand for retail funds which grew by 12% in 2020.
“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,” said Harold Haddad, managing director and partner at BCG.
“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 Mena region was broadly in line with global trends. Global AUM increased by 11% to reach $103 trillion by the end of 2020.
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