Asset management
Last Updated :
27 June 2011
The asset management industry in the GCC and Qatar is set to grow strongly over the coming years, driven by an opportunity to generate emerging market returns in a comparatively low risk environment. The GCC has one of the world’s highest savings rates and Qatar has one of the highest rates within its region at 49%, according to the Economist Intelligence Unit. This pool of savings represents a major opportunity for fund managers able to provide a high quality of service for local investors looking to allocate their funds closer to home.
GCC Sovereign Wealth Funds (SWFs) have also grown their asset bases significantly over the last few years, accounting for half of all foreign assets held by the GCC, while Qatar’s SWF, the Qatar Investment Authority, had assets totalling circa US$85bn as at the end of 2010 (source: TheCityUK Sovereign Wealth Funds Report April 2011). Qatar has also been highlighted by the World Bank as having high inward foreign direct investment potential and performance. Pension funds in the GCC are also a source of investments although, at an estimated US$50.2bn , are still small relative to global standards and recognise that professional asset and liability management will play a significant role in the future.
The GCC, including Qatar, offers a deep pool of private wealth with Qatar’s onshore wealth amounting to some US$25bn in 2009. Over the last 10 years, a significant number of High Net Worth Individuals (HNWI) have tended to reduce the amount of their wealth managed overseas in favour of a greater emphasis on keeping their investments within the GCC. This has created greater opportunities for local asset managers and caused international institutions to enhance their local presence. According to Data Monitor, Qatar is one of the most attractive HNWI wealth markets in the Middle East.
There are also increasing opportunities to allocate capital with the rapidly growing equity and debt markets in the region. The Qatar stock market, with 43 listed companies, rose nearly 25% in 2010 making it the best performing market among all the GCC and Middle Eastern exchanges last year. Meanwhile the Qatar Exchange in partnership with NYSE Euronext continues to develop the scope of the market with plans for new products such as derivatives. The market for bonds and sukuks has also increased substantially with nearly US$3.5bn of issues from Qatar in 2010 which met with huge investor demand. There is also significant scope for growth in mutual funds which at present in Qatar represent just a single percentage of GDP, compared to 70% in the United States and 33% in the United Kingdom.
The combination of Qatar’s fast growing economy, onshore operating environment with full ownership rights and repatriation of profits as well as a robust regulatory and legal regime has already encouraged major international and regional players to set up in the QFC. Meanwhile the QFC continues to promote the growth and extension of the asset management industry, including for example allowing authorised firms to operate foreign funds, establishing a regime for QFC registered retail funds and allowing foreign funds to be marketed to retail customers.
Director, Strategic Development-Asset Management and Banking-The Qatar Financial Centre Authority
A Qatari National, Mr. Yousuf Al-Jaida holds strong financial experience across a variety of roles. Most recently, Mr Al-Jaida was Head of Indirect Investment at the Qatar General Retirement and Pension Authority, which included overseeing the management of hedge fund, private equity, real estate, fixed income and equity portfolio investments. more
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Source: Ernst & Young, Islamic Finances & Investments Report, 2009