MANAMA, Oct 19 (Reuters) – The Gulf Arab region is struggling to develop a local fund industry as it lacks a strong retail investor base, executives and experts said on Monday.
The region has provided a portion of its oil wealth to international fund managers but is yet to develop its own fund industry, which would help provide the depth regional capital markets need to better absorb economic shocks.
Most mutual funds in the region only manage $10 million to $15 million and the industry is highly fragmented.
“The mutual fund industry is driven by middle-income investors and you don’t have that (market segment) here in the Middle East,” Daniel Enskat, senior managing director at Strategic Insight, a mutual funds consultancy, told Reuters during an industry event in Manama.
He said about $150 billion was invested in mutual funds in the region, only 5 to 10 percent of which came from retail investors.
Enskat said the region’s assets were highly concentrated with its sovereign wealth funds and a few rich individual investors, forcing asset managers to accept low fees.
“International fund managers are coming here just to have established relationships when that retail market begins to grow,” he said.
By Frederik Richter
Full article and other related articles can be found at:
Warren Enskat Group 
You must be logged in to post a comment.