GCC opportunities for asset managers

GCC opportunities for asset managers

International asset managers will benefit from the increasingly important role that international life companies play in the GCC region, according to a new report from research company Insight Discovery.

The firm’s Middle East Investment Panorama report shows that international life companies are gaining traction in the GCC region as distributors of investment funds from international asset managers.

In last year’s survey, around half of advisors said they deal with international life companies. This year that figure rose to 63%. The firm said this is “good news” for asset management firms and stressed that they need to have dealings with these companies as well as other fund distributors.

“International asset managers who wish to maximise the likelihood of commercial success across the region need also to deal with other fund distributors – and, in particular, the international life companies. Private banks and other owners/operators of proprietary platforms are also too important to be ignored.”

Advisors access asset managers’ services in four ways. More than one quarter (29%) buy funds directly from international asset managers, while a further 29% buy them indirectly through ‘mirror’ funds that are offered by international life companies. Around 28% buy funds directly through platforms run by these companies, while the remaining 14% buy them through private banks or other proprietary platforms.

The vast majority (83%) of GCC-based advisors use the products and services of international asset managers where the most popular companies include BlackRock, Franklin Templeton, JP Morgan Asset Management, Fidelity, Schroders and Invesco. More than half of advisors said they had had dealings with these managers over the past 12 months, while between one third and one half said they had dealt with HSBC Global Asset Management, Emirates NBD and Threadneedle.

The majority of these firms were “frequently mentioned as being the providers of the best support to advisors over the past year”. Insight Discovery also noted that while Natixis does not seem to have been widely used by advisors this year, it is “highly rated for its support by those that do actually have dealings with it”.

The report also focused on which asset management firms have been used by India-based advisors. Franklin Templeton dominated after nearly two-thirds of Indian advisors said they have used its products and services over the past 18 months. Just over 60% said they had used BlackRock.

The survey also asked advisors what they look for in an international asset manager. Fund performance was rated the most important factor when selecting an international asset manager, while reputation was also noted as crucial.

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