Middle East ‘honey’ tempts asset managers

Fund managers are swarming to the Middle East, and it is no great secret that the honey attracting them is the oil money being channelled to numerous sovereign wealth funds (SWFs) in the region.

Of the estimated $2tn of assets managed in Gulf Co-operation Council (GCC) countries, some 88 per cent emanates from SWFs. The scale of the assets and the lack of indigenous expertise provides a huge and growing opportunity for western fund managers.

"There is not a strong supply of investment management locally, so they naturally gravitate towards external managers,” says Guy Beech, managing partner of IMR Partners, which helps London-based fund companies to market themselves to SWFs.

At the same time, competition is intense. “The pools of assets are large, so the world is beating a path to their door and they have the pick of best-in-class products globally,” says Nick Tolchard, head of Middle East for Invesco.

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