Middle East ‘fastest growth opportunity’ for State Street
State Street Global Advisors, the fourth-largest asset manager in the world, is doubling its resources in the Africa and Middle East region, its president Yie-Hsin Hung has said.
The company is expanding its centres in the UAE and Saudi Arabia to achieve its growth ambitions in the broader region, she said.
The company aims to further diversify its client base and build on the $100 billion in funds it manages on behalf of its regional investors amid a sharp rise in the affluent clientele.
State Street expects the “remarkable growth” in the Gulf to continue, driven by economic diversification programmes, which have opened new avenues of growth for the Boston-based company that manages more than $1.4 trillion in assets.
“This region, I think, probably offers one of our fastest growing opportunities globally,” Ms Hung, who is also chief executive of the company, told The National. “It gives you a sense of just how optimistic [we are] and how important this region is.”
The company this week reopened its office in the Dubai International Financial Centre and will continue to maintain a presence in Abu Dhabi as it looks to increase the headcount in the six-member GCC economic bloc to accelerate growth.
“What we see here is just incredible wealth accumulation, with the financial intermediary market growing, family offices growing, and the talent is abundant here, particularly on the asset management side, which is one reason why we’ve been drawn back to being here in Dubai,” Ms Hung said.
“It’s a combination of the market opportunity, as well as the talent and we’re increasing the number of people here bringing specialist to augment our client coverage.”
Before the end of the year, the company will more than double its tally of asset managers in Dubai and Riyadh offices 30, said Emmanuel Laurina, State Street’s senior executive officer, who oversees its operations in the Africa and Middle East region. The overall headcount in the region, including its operations in Oman, will grow to 68, from the current 35, he said.
State Street, which has operated in the UAE for more than three decades, is bullish about opportunities in exchange traded funds, as well as outsourced investments, portfolio management and investment strategy space in the region.
For global asset managers such as State Street and BlackRock, there is still a lot of untapped potential of growth in the region, which is home to some of the world’s biggest sovereign wealth funds, including the Abu Dhabi Investment Authority and Mubadala Investment Company in the UAE, and the Public Investment Fund in Saudi Arabia.
The rapid development of financial intermediary market, the growth of family offices and a sharp rise in institutional investors, as well as in the number of affluent clients, make regional markets – especially Saudi Arabia and the UAE – very attractive for asset managers.
More than 350 asset management firms operate out of the DIFC, and the onshore financial centre has a healthy pipeline of wealth and asset managers that are looking to set up base in the emirate.
Dubai, the region’s fastest-growing commercial, financial and trading centre, is home to the Middle East’s highest concentration of resident millionaires at 72,500, according to a report by Henley & Partners, which tracks private wealth and investment migration trends worldwide, and global intelligence provider New World Wealth.
Ranked as the 21st wealthiest city in the world, Dubai recorded a 78 per cent growth in its millionaire population over the past 10 years. It is home to 212 centi-millionaires (people with a net worth of $100 million or more in investable assets) and 15 billionaires.
Being home to 22,700 millionaires, Abu Dhabi was ranked as the world’s next big wealth hotspot. The UAE’s capital, which recorded a 75 per cent growth rate in its millionaire population over the past decade, is also home to 68 centi-millionaires and five billionaires, according to the report.
Over the past decade, Saudi capital Riyadh recorded a 40 per cent jump in its millionaire population, with 18,200 millionaires, 67 centi-millionaires and eight billionaires calling it home. The kingdom’s commercial centre, Jeddah, is home to 7,500 millionaires, 32 centi-millionaires and eight billionaires, the report showed.
Ms Hung, who met Sheikh Maktoum bin Mohammed, Deputy Prime Minister, Minister of Finance and First Deputy Ruler of Dubai, said on Tuesday that State Street was open to setting up more offices in the broader region.
“We are keeping an open mind”, but the focus this year remains on existing bases in the UAE, Saudi Arabia and Oman, she said.
In certain locations including in Saudi Arabia, State Street is doubling its efforts as “we think there’s a role for us to play, not only in terms of managing existing assets here but also in helping to develop the capital markets”, Ms Hung said.
What we see is the financial intermediary market growing, family offices growing and the talent is abundant YIE-HSIN HUNG
Chief executive of State Street