Qatar investable assets to reach $270bn by 2022: BCG

DOHA: The Middle East accounted for the highest share of wealth held in investable assets with Qatar investable wealth projected to grow at a CAGR of 7 percent by 2022, according to ‘Global Wealth 2018’ report by The Boston Consulting Group (BCG).

Personal wealth in the Middle East rose by 11 percent to $3.8 trillion in 2017, a significant increase compared with the CAGR for the previous five years. In comparison, personal wealth in Qatar has grown at 9 percent between 2016 and 2017. In 2016 to 2017, private wealth was driven primarily by the positive development of life insurance and pensions. In Qatar, personal wealth is projected to grow at a Compound Annual Growth Rate (CAGR) of 8 percent and expected to reach $270bn in investable assets by 2022.

The report, BCG’s eighteenth annual study of the global wealth management industry, uses global and regional perspectives to examine such topics as the evolution of personal financial wealth, the widening revenue gap and how institutions can narrow it, and the state of offshore business. The report also takes a comprehensive look at a critical initiative for staying competitive in the marketplace: unleashing the power of advanced analytics.

“BCG research suggests that over 70 percent of wealth management clients see hugely personalized services as a key factor in deciding whether to stay with their current provider or switch to another,” said Markus Massi (pictured), Senior Partner & Managing Director of BCG Middle East’s Financial Services practice.

“Taking an in-depth look at wealth distribution, Qatar non-investible assets are expected to increase at a CAGR of 23 percent in the next five years, while investible wealth growth is projected to accelerate at a CAGR of 7 percent,” explains Massi.

“When it comes to asset allocation, currency and deposits, at 45 percent, were the highest proportion of assets in Qatar in 2017, followed by offshore assets at 41 percent, equities and investment funds at 10 percent, and life insurance and pensions at 3 percent. By 2022, currency and deposits, and life insurance and pensions are expected to experience slight growth to 53 percent and 5 percent respectively. For offshore assets, and equities and investment funds will experience a decline to a respective 36 percent and 6 percent respectively,” Massi added.

At 24 percent, life insurance and pensions drove growth by asset class between 2016 and 2017 in Qatar. Other drivers of asset class growth included currency and deposits at 21 percent, and offshore assets at 5 percent. In Qatar, equities and investment funds and bonds experienced negative growth at -16 percent and -2 percent respectively.

Looking to the future, growth by asset class is expected to experience a slightly slower, but steady growth with life insurance and pensions at 23 percent, and currency and deposits at 11 percent CAGR over the next five years. In the same period, growth in offshore assets will remain constant at CAGR of 5 percent and equities and investment funds and bonds will accelerate to -2 percent CAGR and -1 percent CAGR respectively.

While offshore share is expected to decline over the next five years from 41.4 percent in 2017 to 35.5 percent in 2022, it will continue to grow at a CAGR of 4.6 percent to reach $95bn in Qatar in the same period.