The fund management giant, which is responsible for 10% of the world’s assets, said it found that institutional investors across the Gulf region, including sovereign funds, central banks and pension funds, expected strong growth in funds under management over the next couple of years and are looking to diversify their portfolios.
In a survey it conducted with Oxford Economics of 306 investment professionals across the Middle East and North Africa (MENA) region, State Street said 91% planned to diversify into more complex asset classes like emerging market equities, hedge funds, and infrastructure.
The survey also found 42% of the region’s big investors planned to increase their allocation to exchange traded funds (ETFs); and 73% expected to see growth in demand for funds which are led by environmental, social and governance (ESG) considerations.
Liz Nolan, chief executive officer, EMEA, State Street and chairperson for State Street Global Advisors, EMEA said: “There is an almost universally positive outlook and prediction of growth in MENA.”
“Having had a presence in the region for more than a quarter of a century, we have a unique perspective on the institutional investor community, and their positive outlook mirrors our own.”
State Street said Saudi Arabia was seen as an engine of growth in the region, with key drivers of inflows cited by 83% of its survey respondents as the inclusion of Saudi stocks in emerging market indices, as well as the Saudi Vision 2030 economic plan, which was cited by 74 % of participants.
State Street’s new office will be located in the Abu Dhabi Global Market (ADGM), and be led by Oliver Berger, senior executive officer for State Street Bank and Trust, and Emmanuel Laurina, senior executive officer for State Street Global Advisors.