The Gulf Cooperation Council (GCC) states are already among the wealthiest regions globally and are poised to further enhance their status as a key hub for global wealth. According to Boston Consulting Group, the region’s financial wealth is projected to grow at an annual rate of 4.7% through 2027, reaching $3.5 trillion, up from $2.8 trillion in 2022.

“Although global growth is relatively modest, the GCC stands out as one of the fastest-growing regions in terms of wealth accumulation,” notes Abdulla Al-Sada, senior executive vice president of QNB Group Asset and Wealth Management. QNB Group, headquartered in Qatar, is the largest financial institution in the MENA region by assets and was the first to offer private banking services in the emirate. “We are continuously working to enhance our wealth management services to meet the needs of our sophisticated clientele.”

The GCC presents significant opportunities for private wealth managers. The region already hosts a large number of private banks, asset management firms, and family offices, including prominent global institutions like Edmond de Rothschild, Goldman Sachs, and BlackRock. New firms are regularly entering the market.

In December, Farro Capital launched operations in Dubai’s International Financial Center (DIFC). Rajiv Garg, senior executive officer of the Singapore-based multi-family office, emphasized that expanding into the Middle East was a strategic move. He highlighted that the region’s family office market is expected to exceed $1 trillion by 2026, driven by a mix of traditional wealth and newly created fortunes from billionaires and unicorn founders.

Old Money

Historically, wealthy families and entrepreneurs from the GCC region often deposited their funds in private banks in Switzerland or Luxembourg for security. However, according to a recent report by Strategy&, PwC’s global strategy consulting arm, more than 70% of the region’s private wealth is now held in offshore accounts. Today, GCC clients are increasingly focused on the transfer of wealth to the next generation.

“We have observed a notable shift in recent years towards prioritizing generational wealth transfer, alongside a rise in tech entrepreneurs and family offices, particularly in the UAE and Saudi Arabia,” says Antoine Chemali, CEO of BNP Paribas Wealth Management Middle East, who has been working with the region’s families since the 1970s.

By 2030, around $1 trillion in assets is expected to be transferred within the Middle East. Local legislation has adapted to support this transition. For many GCC families, who have accumulated significant wealth from the oil and gas sector over a relatively short period, this will be their first major generational wealth transfer. Asset managers see this as an opportunity to offer tailored services.

“We position ourselves as an extension of these families, functioning as their de facto family office with comprehensive services,” says Rajiv Garg. “Our aim is to transform how families manage their wealth, integrate with their trusted circle, and assist in preserving and growing their assets for future generations.”

Experts predict that the new generation will have different expectations compared to their predecessors.

“They will seek innovative financial solutions, digital tools, sustainable wealth management, and diverse investment products across global asset classes,” says Sana Al-Hadlaq, senior executive director of Wealth Management at Kamco Invest, one of the largest asset managers in the region with over $16 billion in assets under management. “They expect their wealth managers to offer global reach and access across various markets and asset classes, including alternatives such as private equity, venture capital, and real estate,” adds Abdulla Al-Sada of QNB.

While international investments remain appealing, there is a growing trend among younger clients to keep a larger portion of their assets within the region.

“International investment is still attractive, but there is a noticeable trend of retaining more assets locally,” says Michel Longhini, group head of Global Private Banking at First Abu Dhabi Bank. “This shift has been a significant driver of growth and diversification in private wealth management within the UAE and GCC, as governments have implemented stronger regulatory frameworks and initiatives to promote the establishment of local investment firms.”

PwC forecasts that the wealth management industry in the region will grow faster than the global average, reaching $500 billion in onshore assets by 2026, up from $400 billion in 2022. This presents considerable opportunities for local firms to enhance their offerings.

New Wealth

In addition to traditional wealthy families, the GCC has increasingly attracted affluent individuals from around the world. According to the Henley Private Wealth Migration Report, the UAE has seen a significant influx of millionaires since the pandemic, with 4,000 to 5,000 new residents arriving annually from countries such as India, the UK, Pakistan, Nigeria, and China. These individuals are drawn by the prospect of a safe environment for their assets, business opportunities, and a luxurious lifestyle, as noted by Vipul Kapur, head of Private Banking at Mashreq, one of the UAE’s leading private banks.

To appeal to these high-net-worth individuals, GCC governments have updated their regulatory frameworks, including reforms to labor laws, residency programs, and property and business ownership rules.

“The UAE and other GCC countries have introduced regulatory changes to create a more attractive financial environment, encourage investment, and stimulate economic growth,” says Michel Longhini. In 2023, FAB Private Banking reported a 14% increase in year-on-year revenue and a 22% rise in assets under management, largely due to the acquisition of new clients.

The influx of new wealth into the GCC is expected to continue. The UAE’s recent removal from the Financial Action Task Force’s “grey list” of countries addressing deficiencies in anti-money laundering and counter-terrorism financing measures is likely to enhance investor confidence. In Saudi Arabia, a new policy requiring foreign companies to establish regional headquarters in the kingdom to engage with the government could attract additional investment, targeting the MENA region’s largest market.

Local Lenders Adapt

Historically, private wealth and asset management has been dominated by international institutions, but local players are increasingly stepping up. Some are forging partnerships with global firms.

“We have established strategic alliances with international partners to offer enhanced opportunities and services,” says Sana Al-Hadlaq. “This approach complements the value provided by Western financial institutions.”

Other local managers are focusing on competing directly by offering superior products and services.

“To stand out, we need to excel in specialized services, customer experience, and innovative solutions,” says Vipul Kapur of Mashreq. “This involves embracing new technologies, managing security risks, and meeting customer expectations for seamless digital interactions.”

The competition is especially intense in digital products and fintech, with AI expected to transform the industry.

“These technologies will revolutionize asset and wealth management, impacting everything from client interactions to back-office operations, with a strong focus on personalization and efficiency,” says Abdulla Al-Sada of QNB.

With both local and international client bases expanding, GCC asset managers have a positive outlook if they can capitalize on these opportunities. Emerging technologies may enable them to close the gap with global leaders more rapidly than expected. As regulatory frameworks continue to evolve, the region is anticipated to experience significant financial innovation, including advancements in blockchain and green finance, further solidifying its position in the global financial landscape.

As GCC asset managers enhance their capabilities, they are also exploring expansion into new markets across Africa and Asia, aiming to tap into growing segments of high-net-worth individuals.