Markus Massi, Partner & Managing Director at BCG Middle East
Saudi Arabia, Kuwait, Qatar and UAE emerged as four of the top ten countries in the world with the highest density ultrawealthy households. The findings appear in BCG’s eleventh annual Global Wealth report titled Shaping a New Tomorrow: How to Capitalize on the Momentum of Change, which was released recently in the Middle East.
According to the study, “ultra-high-net-worth” (UHNW) households, defined as those with more than $100 million in AuM, were most highly concentrated in Saudi Arabia registering 18 per 100,000 households. This was followed by Switzerland (10), Hong Kong (9), Kuwait (8), Austria (8), Norway (7), Qatar (6), Denmark (5), Singapore (5) and the UAE (5).
Qatar, Kuwait and UAE also made it to the top ten list in terms of the highest proportion of millionaire household by market with 8.9 percent, 8.5 percent and 2.6 percent millionaire households, respectively.
Positive trends also emerged for Middle East and Africa overall, as assets under management rose by 8.6 percent to hit $4.5 trillion in 2010 and with expectations to reach $6.7 trillion by 2015.
Dr. Sven-Olaf Vathje, Partner and Managing Director at BCG Middle East said, “The results are not surprising. Given the demographics and overall wealth of these petroleum-rich countries wewould expect a higher proportion of UHNW households than in other parts of the world. Growth in assets under management also reflects the strong fundamentals of the region, driven by continuing strong petroleum prices. Nevertheless, the risk appetite of regional investors remains low, especially when compared to levels seen before the downturn. The asset allocation of GCC high net worth individuals remains overweight in cash and capital-protected products".
Offshore wealth - defined as assets booked in a country where the investor has no legal residence or tax domicile - from the Middle East and Africa reached a total of $1.4 trillion, with the major proportion held in UK, Channel Islands and Dublin ($0.52 trillion) and Switzerland ($0.49 trillion).
Within the region, Dubai sustains its position as most prominent offshore center in the Arab world, with Saudi Arabia, Turkey, Iran, Kuwait and Russia emerging as the most important origins of offshore wealth.
Markus Massi, Partner & Managing Director at BCG Middle East said, “The recent unrest in the region has reversed the trend towards "onshoring" wealth in some countries in the Middle East. For the more stable Gulf States, however, the onshoring trend continues. Some Gulf jurisdictions, for example, Dubai, are now attracting more wealth from other Middle East countries as they act as offshore centers themselves.”