Saudi Arabia: Saudi Arabia’s asset management industry is on track to surpass $400 billion by 2026, cementing the Kingdom’s position as the largest in the Gulf Cooperation Council, according to a new report. 

Fitch Ratings said Islamic funds are expected to remain dominant, though the industry remains exposed to oil price sensitivity, as well as local, regional, and global market volatility and geopolitical risks. 

Despite market turbulence — with Tadawul’s equity market capitalization down around 13 percent year on year by the end of August — the sector continues to be supported by strong fundamentals. 

The growth reflects a broader regional trend, with total GCC assets rising 9 percent to $2.2 trillion by the end of 2024, according to a report released last month by Boston Consulting Group. 

Bashar Al-Natoor, global head of Islamic Finance at Fitch Ratings, said: “Saudi Arabia’s AMI is on a steady growth path, supported by ongoing reforms and deeper local capital markets.” 

He added: “Shariah-compliant funds remain the majority, with product breadth widening across areas such as new IPOs, sukuk and bonds, ETFs and private credit.” 

Al-Natoor also noted that new initiatives, including voluntary pension and savings schemes, should enhance access and liquidity. 

“Although market volatility and oil-price sensitivity pose near-term risks, foreign participation is rising, and Saudi sukuk largely carry investment-grade ratings, supporting resilience.” 

Investor confidence is rising, with the Public Investment Fund forming strategic partnerships with global asset managers, including BlackRock and Franklin Templeton, representing roughly $12 billion in potential inflows. 

Fitch noted that international and regional institutions accounted for about 15 percent of industry revenue in the first half of 2024, while Saudi bank-affiliated managers retained 63.5 percent. 

“The industry AUM grew 21 percent yoy at end-1H25 to $306.1 billion with roughly half in private funds, followed by discretionary portfolio management, and public funds,” the report added. 

While Saudi bank-affiliated managers still control the majority of revenue, Fitch said the government’s strategic vision aims to grow the industry’s AUM from 23 percent of the gross domestic product in the first half of 2025 to 40 percent by 2030, signaling a profound deepening of the Kingdom’s capital markets.

This projected growth is the latest milestone in a decade-long expansion. The Kingdom’s asset management industry grew 12 percent annually from 2015 to 2024, with total assets reaching nearly $295 billion by the first quarter of 2025, according to S&P Global.