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The Chartered Alternative Investment Analysts Society has confirmed that the Middle East region enjoys great wealth, as many companies and institutions have sufficient resources to invest in areas such as private equity, real estate and hedge funds, and these investments have enabled them to achieve attractive risk-adjusted returns across different economic cycles.
Institutional investors in the Gulf have been leading the way, tapping into their resources to invest in areas such as private equity, real estate and hedge funds, the association said in a report. Now, private wealth is gaining ground and with individuals accounting for a large share of the region’s wealth, the focus is shifting to providing them with the same investment opportunities as institutions.
By 2024, many GCC investors are showing a strong preference for alternative investments, particularly in private equity and real estate, the report added. The number of high net worth individuals (those with a net worth of US$30 million or more) has been steadily rising across the GCC, with the UAE and Saudi Arabia leading the way. A recent report suggests that younger HNWIs in the Middle East have a stronger preference for private market assets, such as private equity, real estate and infrastructure, compared to older generations.
In addition, they value investments that align with their beliefs, such as Islamic finance and sustainability. Most (91%) already invest in Islamic finance, and 88% plan to increase their sustainable investments. Early products, such as “liquid alternatives,” brought hedge fund strategies to a wider audience, but results were mixed due to regulatory restrictions that limited what managers could do.
