Assets under management in the Middle East grew by 11 per cent to $1.2 trillion in 2020, compared with $1.1tn in 2019, despite coronavirus-induced economic headwinds, according to a report by management consultancy Boston Consulting Group.
The growth was primarily due to an increase in the assets of sovereign wealth funds as global markets rebounded and oil prices gradually recovered from a steep drop in the first half of the year, the Global Asset Management 2021: the $100 Trillion Machine report found.
Many of the wealth funds had high exposure to developing and emerging market equities, both of which fared well as financial markets bounced back, the study said.
“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 BCG managing director and partner Harold Haddad.
“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.”
Wealth funds owned by regional governments such as Abu Dhabi's Mubadala and Saudi Arabia's Public Investment Fund have been on an investment spree over the past year, snapping up assets in sectors such as technology, automation and health care.
Mubadala's AUMs grew by 5 per cent from Dh853 billion in 2019 to Dh894bn at the end of last year while PIF's AUMs during the reporting period stood at $430bn.
Automation, digitisation and artificial intelligence are the top investment themes for global institutional and family office investors, according to a recent study by Bahraini asset manager Investcorp.
The total value of assets under management globally hit $103tn at the end of 2020, up 11 per cent from $93tn in 2019, as strong market performance and favourable net flows buoyed the industry, the BCG report found.
In other regions, North America's AUMs grew by 12 per cent to reach $49tn while Europe and Asia recorded growth of 10 per cent and 11 per cent, respectively, according to BCG’s 19th annual study of the global asset management industry.
At the global level, net inflows for the asset management industry stood at $2.8tn in 2020, or 3.1 per cent of the total AUMs at the beginning of the year – compared with a historical average between 1 per cent to 2 per cent over the previous decade, the report said.
Retail investors were the main driver, contributing net flows of 4.4 per cent in 2020, double the figure for institutional investors.
Global retail AUM portfolios grew by 11 per cent in 2020, representing 41 per cent of the global asset pool valued at $42tn.
Institutional investment also grew at a similar pace to $61tn, or 59 per cent of the global market, the BCG study found.
“The key contributors to aggregate flows globally were fixed-income products, which received additional support from various government stimulus programmes and money market funds,” the report said.
However, profitability for asset managers was largely flat across the board last year in comparison with 2019, as costs and fee compression kept operating profits hovering at about 34 per cent of net revenue, the BCG report said.
Most traditional asset classes recorded double-digit growth in 2020, outpacing their five-year and 10-year historical averages, the research found.
The resilience of the asset management industry was tested in 2020, with initial outbreak disruption and economic tailwinds presenting a period of sizeable uncertainty
Harold Haddad,
managing director and partner at BCG
Among traditional active assets, those managed by large-cap equity funds and domestic government-based fixed-income funds grew by 11 per cent over the course of last year. Money market funds were up 12 per cent.
Meanwhile, passive investments became popular during the coronavirus pandemic. The index-tracking products grew their AUMs by 17 per cent globally during 2020 through a combination of strong net inflows and market growth, the report said.
Exchange-traded funds had a particularly strong year. Both equity ETFs and fixed-income ETFs beat their 10-year average growth rates, capturing AUM growth of 21 per cent and 24 per cent, respectively, the study said.
“On the revenue side, new asset classes, particularly within private markets and alternatives in general, will be crucial to growth during the next several years,” the BCG report said.
UPI facts
More than 2.2 million Indian tourists arrived in UAE in 2023
More than 3.5 million Indians reside in UAE
Indian tourists can make purchases in UAE using rupee accounts in India through QR-code-based UPI real-time payment systems
Indian residents in UAE can use their non-resident NRO and NRE accounts held in Indian banks linked to a UAE mobile number for UPI transactions
The specs
- Engine: 3.9-litre twin-turbo V8
- Power: 640hp
- Torque: 760nm
- On sale: 2026
- Price: Not announced yet
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T20 World Cup Qualifier, Muscat
UAE FIXTURES
Friday February 18: v Ireland
Saturday February 19: v Germany
Monday February 21: v Philippines
Tuesday February 22: semi-finals
Thursday February 24: final
Killing of Qassem Suleimani
Anti-semitic attacks
The annual report by the Community Security Trust, which advises the Jewish community on security , warned on Thursday that anti-Semitic incidents in Britain had reached a record high.
It found there had been 2,255 anti-Semitic incidents reported in 2021, a rise of 34 per cent from the previous year.
The report detailed the convictions of a number of people for anti-Semitic crimes, including one man who was jailed for setting up a neo-Nazi group which had encouraged “the eradication of Jewish people” and another who had posted anti-Semitic homemade videos on social media.
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
The stats: 2017 Jaguar XJ
Price, base / as tested Dh326,700 / Dh342,700
Engine 3.0L V6
Transmission Eight-speed automatic
Power 340hp @ 6,000pm
Torque 450Nm @ 3,500rpm
Fuel economy, combined 9.1L / 100km
German intelligence warnings
- 2002: "Hezbollah supporters feared becoming a target of security services because of the effects of [9/11] ... discussions on Hezbollah policy moved from mosques into smaller circles in private homes." Supporters in Germany: 800
- 2013: "Financial and logistical support from Germany for Hezbollah in Lebanon supports the armed struggle against Israel ... Hezbollah supporters in Germany hold back from actions that would gain publicity." Supporters in Germany: 950
- 2023: "It must be reckoned with that Hezbollah will continue to plan terrorist actions outside the Middle East against Israel or Israeli interests." Supporters in Germany: 1,250
Source: Federal Office for the Protection of the Constitution
Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
UK-EU trade at a glance
EU fishing vessels guaranteed access to UK waters for 12 years
Co-operation on security initiatives and procurement of defence products
Youth experience scheme to work, study or volunteer in UK and EU countries
Smoother border management with use of e-gates
Cutting red tape on import and export of food
KILLING OF QASSEM SULEIMANI
Zayed Sustainability Prize
How to help
Donate towards food and a flight by transferring money to this registered charity's account.
Account name: Dar Al Ber Society
Account Number: 11 530 734
IBAN: AE 9805 000 000 000 11 530 734
Bank Name: Abu Dhabi Islamic Bank
To ensure that your contribution reaches these people, please send the copy of deposit/transfer receipt to: juhi.khan@daralber.ae
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
The specs: Macan Turbo
Engine: Dual synchronous electric motors
Power: 639hp
Torque: 1,130Nm
Transmission: Single-speed automatic
Touring range: 591km
Price: From Dh412,500
On sale: Deliveries start in October
Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
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2.0
Director: S Shankar
Producer: Lyca Productions; presented by Dharma Films
Cast: Rajnikanth, Akshay Kumar, Amy Jackson, Sudhanshu Pandey
Rating: 3.5/5 stars
Richard Jewell
Director: Clint Eastwood
Stars: Paul Walter Hauser, Sam Rockwell, Brandon Stanley
Two-and-a-half out of five stars
UAE currency: the story behind the money in your pockets
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
If you go
Flight connections to Ulaanbaatar are available through a variety of hubs, including Seoul and Beijing, with airlines including Mongolian Airlines and Korean Air. While some nationalities, such as Americans, don’t need a tourist visa for Mongolia, others, including UAE citizens, can obtain a visa on arrival, while others including UK citizens, need to obtain a visa in advance. Contact the Mongolian Embassy in the UAE for more information.
Nomadic Road offers expedition-style trips to Mongolia in January and August, and other destinations during most other months. Its nine-day August 2020 Mongolia trip will cost from $5,250 per person based on two sharing, including airport transfers, two nights’ hotel accommodation in Ulaanbaatar, vehicle rental, fuel, third party vehicle liability insurance, the services of a guide and support team, accommodation, food and entrance fees; nomadicroad.com
A fully guided three-day, two-night itinerary at Three Camel Lodge costs from $2,420 per person based on two sharing, including airport transfers, accommodation, meals and excursions including the Yol Valley and Flaming Cliffs. A return internal flight from Ulaanbaatar to Dalanzadgad costs $300 per person and the flight takes 90 minutes each way; threecamellodge.com
