GCC Asset Management Market Strengthens to $2.7 Trillion, Growing 10% in 2025
Assets under management (AuM) in the Gulf Cooperation Council (GCC) experienced a significant increase of 10% in 2025, reaching a total of $2.7 trillion. This growth marks one of the most robust annual performances in over a decade, as detailed in the latest report from Boston Consulting Group (BCG).
The findings, part of BCG’s Global Asset Management Report 2026: An Imperative for Growth, indicate that the retail segment in the GCC outperformed expectations, achieving a remarkable growth rate of 14%. In contrast, institutional assets rose by 9%. Despite the dominance of institutional assets, which account for 93% of total regional AuM, the faster growth rate of retail assets, representing 7%, signals a shift in market dynamics.
Regional Growth Anchored by Saudi Arabia
Saudi Arabia continues to be a pivotal player in regional growth, holding the largest share of retail mutual funds and exchange-traded funds (ETFs) across both the GCC and the broader Middle East. The United Arab Emirates (UAE) and Kuwait follow closely in this regard. The General Organization for Social Insurance Public Pension Agency (GOSI-PPA) in Saudi Arabia remains the largest pension fund in the region, while Kuwait’s WAFRA holds the second-largest position. Among sovereign wealth funds, the Kuwait Investment Authority leads in externally managed AuM, followed by the Abu Dhabi Investment Authority.
Lukasz Rey, Managing Director & Partner and Middle East Head of Financial Institutions at BCG, stated that the GCC asset management industry is at a critical juncture that necessitates a fundamentally different competitive approach. He noted that while immediate market dynamics will be influenced by broader economic conditions, the region’s structural fundamentals remain attractive. Rey emphasized that asset managers who invest in distribution capabilities and technological advancements will be best positioned to navigate uncertainties and seize emerging opportunities.
Global Trends Impacting Asset Management
In addition to regional insights, BCG’s report identifies key structural forces reshaping the global asset management landscape. The growing importance of distribution, the adoption of AI-driven operating models, and the rise of tokenization are highlighted as transformative trends. The report reveals that growth is increasingly concentrated among leading firms with significant scale and distribution access. Revenue growth is becoming decoupled from asset growth as fee pressures mount, suggesting a more competitive environment where only a select few firms are poised to capture substantial growth.
Distribution as a Competitive Differentiator
The report underscores a structural shift in the competitive landscape of asset management, with distribution emerging as the primary battleground for growth. As product manufacturing becomes more commoditized, control over distribution channels—including platforms, advisors, and institutional relationships—has become a crucial determinant of success.
Artificial intelligence (AI) is accelerating these changes by compressing traditional differentiation and enabling new forms of scalability. BCG estimates that asset managers could reduce costs by 25–35% over the next three to five years while simultaneously increasing research coverage two- to five-fold and enhancing client coverage per relationship manager by three to five times. This transformation allows firms to scale operations without proportional increases in headcount, fundamentally altering the economics of growth.
However, many firms remain in the early stages of AI adoption, focusing on pilot projects rather than comprehensive transformations. Those that do not redesign their operating models risk falling behind AI-native competitors that can scale more rapidly and operate more efficiently.
Opportunities for Middle East Asset Managers
Mohammad Khan, Managing Director & Partner at BCG, pointed out that asset managers in the Middle East have a unique opportunity to leapfrog traditional operating models by integrating AI and digital capabilities into their core operations. He acknowledged that while navigating evolving market conditions will be challenging, firms that strategically build scalable distribution networks and technology-enabled platforms will be well-positioned to define the next era of regional asset management.
Tokenization as a Disruptive Force
Alongside AI, tokenization and digital assets are emerging as significant forces that could reshape market structures. The value of tokenized real-world assets is projected to reach $14 trillion by 2030 and $55 trillion by 2035, creating new channels for distribution, ownership, and product design. These developments may alter how assets are accessed, transferred, and managed, potentially diminishing traditional advantages associated with scale and distribution while enabling new entrants to compete.
Nabil Saadallah, Managing Director & Partner at BCG, remarked that the convergence of tokenization, AI, and changing investor expectations is reshaping the competitive landscape in favor of agility over incumbency. He noted that for asset managers in the GCC, success will increasingly depend on their ability to deliver personalized solutions at scale. Those who embrace this shift stand to unlock significant value in a rapidly evolving market.
As market-driven growth transitions to competition-driven growth, asset managers face a more complex and unforgiving landscape. Capturing net inflows, establishing scalable distribution, and embedding technology into core operations will be critical determinants of success.
Source: www.zawya.com
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Published on 2026-06-30 07:26:00 • By the Editorial Desk
