An affluent client base meant that asset managers in Saudi Arabia were able to weather the economic impact of the pandemic.
Furthermore, they have reason to be cautiously optimistic about growth prospects in 2021.
These were the main findings from an asset management review conducted by KPMG which analysed the performance of 12 firms regulated by the Capital Market Authority (CMA).
It found that the firms managed an aggregate of SAR 471 billion (US$125 billion) of assets as of the end of September 2020, a growth of 14% since December 2019.
“A resilient asset management industry has withstood the two-fold challenges posed by the decline in oil prices and the Covid-19 pandemic, whereby investor redemptions have been limited and asset prices have either been stable or have a rebound,” stated Ovais Shahab, head of financial services at KPMG in Saudi Arabia.
Shahab added that the asset management industry is “well prepared to play a pivotal role in providing the necessary impetus to the overall economic recovery” in Saudi Arabia.
For example, KPMG forecasts a rise in the use of venture capital and private equity funds in 2021 to provide capital to startups and to benefit from upcoming privatisations, and the presence of distressed assets as a result of the pandemic.
The review also suggests that Saudi fund managers should focus on proving diversified products to potential investors and also be prepared to shift their investment strategies in line with evolving risk/reward appetites among investors.
A continued focus on digitalisation will also help fund managers to excel in what is likely to be a more competitive market in 2021, concluded the review.
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