Assets under management (AuM) in the GCC grew by 10% to reach $2.7 trillion in 2025, marking a decade-high performance according to Boston Consulting Group (BCG). While institutional assets comprise 93% of the market, the retail segment is expanding rapidly at 14%. Saudi Arabia continues to anchor regional growth, with BCG identifying AI and tokenisation as the next major competitive frontiers for asset managers.
Saudi Arabia continues to anchor regional growth, commanding the highest share of retail mutual funds and ETFs across both the broader Middle East and the GCC, followed by the UAE and Kuwait. The Kingdom’s General Organization for Social Insurance Public Pension Agency (GOSI-PPA) remains the largest pension fund in the region, with Kuwait’s WAFRA maintaining its position as the second largest. Among sovereign wealth funds, the Kuwait Investment Authority recorded the largest externally managed AuM, followed by the Abu Dhabi Investment Authority.
“The GCC asset management industry is at an inflection point that demands a fundamentally different approach to competition,” said Lukasz Rey, Managing Director & Partner and Middle East Head of Financial Institutions at BCG. “While near-term dynamics will depend on the broader market environment, the region’s structural fundamentals remain compelling, and many asset managers continue to view the GCC as a strategic priority. Firms that invest in distribution capabilities and technological transformation will be best positioned to navigate uncertainty and capture the opportunities ahead.”
In addition to regional dynamics, BCG’s Global Asset Management Report 2026 identifies key structural forces transforming the industry on a global scale, from the growing centrality of distribution to the adoption of AI-driven operating models and the emergence of tokenization.
Globally, BCG’s report finds that growth is becoming more concentrated among leading firms with scale and distribution access. Revenue growth is decoupling from asset growth as fees decline, while traditional economies of scale are being offset by rising technology investment and fee pressure. Together, these trends point to a more competitive environment in which only a subset of firms is positioned to capture disproportionate growth.
Distribution Becomes the Key Competitive Differentiator
The report emphasizes that the basis of competition in asset management is undergoing a structural shift globally, with distribution emerging as the primary battleground for growth. As product manufacturing becomes increasingly commoditized, control of distribution channels, including platforms, advisors, and institutional relationships, is becoming the key determinant of success.
AI is accelerating these shifts by compressing traditional differentiation and enabling new forms of scale. Globally, BCG estimates asset managers could reduce costs by 25–35% over the next three to five years, while increasing research coverage two- to five-fold and client coverage per relationship manager three to five-fold, all with faster, more scalable personalization. AI allows firms to scale without proportional headcount increases, fundamentally changing the economics of growth. However, most firms remain in early adoption stages, focused on pilots rather than full transformation. Those that fail to redesign their operating models risk falling behind AI-native competitors that can scale faster and operate more efficiently.
“Middle East asset managers have an opportunity to leapfrog traditional operating models by embedding AI and digital capabilities into their core operations,” said Mohammad Khan, Managing Director & Partner at BCG. “While the path forward will require navigating evolving market conditions, firms that move strategically to build scalable distribution networks and technology-enabled platforms will be well positioned to shape the next era of regional asset management.”
Tokenization as a Catalyst for Disruption
Alongside AI, BCG’s global report identifies tokenization and digital assets as emerging forces that could reshape market structure. The value of tokenized real-world assets is projected to reach $14 trillion by 2030 and $55 trillion by 2035, creating new channels for distribution, ownership, and product design. These developments could alter how assets are accessed, transferred, and managed, potentially weakening traditional advantages tied to scale and distribution while enabling new entrants to compete.
“The convergence of tokenization, AI, and evolving investor expectations is reshaping the competitive landscape in ways that favor agility over incumbency,” said Nabil Saadallah, Managing Director & Partner at BCG. “For asset managers in the GCC, success will increasingly hinge on their ability to deliver personalized solutions at scale, those who embrace this shift stand to unlock significant value in a rapidly transforming market.”
As market-driven growth gives way to competition-driven growth, asset managers face a more complex and less forgiving landscape. Capturing net inflows, building scalable distribution, and embedding technology into core operations will determine which firms succeed.
