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The Middle Eastern Economic Boom: Factors Driving Growth in Wealth Management

  • Publish Date: Posted 03 June 2024
  • Author: Gina Le Prevost FIRP DipRP, CEO
​Accelerated Wealth Accumulation

A significant driver behind the region's economic expansion is the rapid accumulation of wealth in the Middle East. This surge has led to a corresponding increase in the number of family / private offices in the region. Nearly 6,000 UHNW individuals in the Middle East have a combined net worth of $995 billion, a figure expected to rise further.

Increasing Demand for Professional Wealth Management Structures

Family businesses are the cornerstone of the Middle Eastern economy, contributing 60% of the region's GDP. With many of these businesses experiencing substantial growth and more Initial Public Offering (IPO) events, there is a growing need for professional wealth management structures like family offices to manage post-IPO wealth creation effectively. The polarization between risk appetite and investment strategies for personal and business wealth has further propelled the rise of family offices, enabling families to professionalise and institutionalise their wealth while maintaining control over investment decisions and privacy.

Emphasis on Wealth Transition

Wealth transition and succession planning have become major focal points in the Middle East, given that most wealth in the region is first-generation. With an estimated $2 trillion expected to transfer from the current generation to the next in the GCC alone in the next decade, family offices play a crucial role in organising this wealth transfer among family stakeholders.

Diversification of Family Holdings

Traditionally focused on wealth preservation, family offices are now shifting towards identifying interesting alternative investment opportunities for wealth growth. While real estate remains a key asset class, family offices are expanding their investment outlook, particularly into digital and fintech sectors, as well as sustainable investment practices and venture capital. It has been found that 81% of regional investors consider environmental, social, and governance (ESG) factors in their investment decisions.

Recruitment in the Family Office Space

Historically, recruiting top talent for family offices is always a popular and interesting career change for our candidates and can offer long-term career prospects. As family offices establish better corporate structures, they are increasingly popular for attracting talent. The broad landscape of international firms in the region and the perception of instability of some jobs among larger organisations further bolster the appeal of family offices as career destinations for experienced investment professionals, bankers, lawyers and accountants in particular. Family offices provide opportunities to offer more variety of duties, greater decision-making independence, enhancing career trajectory in a more entrepreneurial environment by being closer to the owner or principle family members.

For family offices seeking senior executive candidates with a proven track record in business building and performance delivery, please contact us.