Asset managers in the GCC will be “somewhat resilient” to the impact of the Covid-19 pandemic and falling oil prices, according to a report from rating agency, Moody’s.
Assets under management have fallen since the coronavirus outbreak in mid-February due to lower market valuations, but fund inflows have remained largely positive for the largest firms in the region. This is in contrast to many of their western counterparts.
The report ascribes the resilience to both a track record of strong performance and an affluent client base that includes high net-worth individuals, family offices and sovereign wealth funds – all of which generally have higher risk tolerance and longer investment horizons.
Nonetheless, Vanessa Roberts, vice president at Moody’s Investor Services, expects risk appetite to remain subdued and some diversification away from the region.
In addition, low oil prices will also be a headwind for GCC managers especially if it leads to budgetary pressures for GCC governments who then adopt conservative fiscal policies which could erode the savings capacity of both individuals and institutions.
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