Kingdom leads growth of Gulf asset market to $2.7 trillion in 2025

Saudi Arabia topped the Gulf Cooperation Council (GCC) countries with the largest share in investment funds and led the growth of the Gulf asset market, which rose by 10% to $2.7 trillion in 2025, as artificial intelligence technologies play a pivotal role in developing the sector. S&P Global Ratings expects the Kingdom's asset management sector to exceed $500 billion by the end of 2030, supported by initiatives implemented by regulators, continued increase in issuances in debt and equity markets, and growing availability of investment tools such as index funds and real estate investment trusts.

According to a recent report by Boston Consulting Group, the growth of assets under management in the Gulf last year was driven by strong individual investor performance, while competition in the sector is undergoing structural shifts led by AI and diversification of investment product distribution channels. The value of assets under management in the Gulf reached $2.7 trillion in 2025, with the share of individual investors growing by 14% to account for 7% of total assets, while institutions hold the remainder.

Lukas Rey, Managing Director and Partner, Head of Financial Institutions at BCG in the Middle East, said: 'Although short-term performance will remain tied to market developments and macroeconomic conditions, the region's fundamentals and structural bases remain strong and attractive, prompting many asset management firms to consider the GCC countries a strategic priority for expanding their businesses and achieving sustainable growth.'

Mohamed Ali Yassin, CEO of Mazaya Al Ghaf from Lonet, expects assets under management in the Gulf to continue growing this year once final peace agreements are signed in the region and investment flows return.

He added: 'The start of the year was strong before the war for all economic activities, and there was an influx of investments and asset management firms into the region. I believe this will accelerate, perhaps by the end of the third quarter, if peace agreements are signed and respected by all parties.' BCG believes that controlling distribution channels for products and services, whether through investment platforms, financial advisors, or institutional relationships, is the most important factor determining institutions' ability to achieve growth and enhance their market share.

Role of Artificial Intelligence

The company added that AI plays a pivotal role in accelerating the structural transformations of competition in the sector by narrowing gaps between institutions and opening new horizons for growth and expansion. The firm's estimates indicate that asset management firms globally could reduce current asset management costs by 25% to 35% within three to five years.

AI enables institutions to expand their operations without needing to increase headcount, fundamentally reshaping the growth economics of the sector, although most institutions are still in the early stages of adopting these technologies.

Mohammed Khan, Managing Director and Partner at BCG, said: 'Asset management firms in the Middle East have a unique opportunity to leapfrog traditional operating models by embedding AI and digital capabilities at the core of their operations.'

The report added that asset tokenization and digital assets are among the most important emerging trends expected to fundamentally transform market structures and asset trading mechanisms in the coming years. The report estimates that the value of tokenized real assets globally will reach around $14 trillion by 2030 and rise to approximately $55 trillion by 2035.

Global consultancy Kearney predicted in a report earlier this year that tokenization technology could unlock a market worth up to $500 billion in the GCC countries by 2030.

On the other hand, point-of-sale (POS) sales in Saudi Arabia declined to SAR 12.4 billion last week, compared to about SAR 13.2 billion in the previous week. According to the weekly POS report from the Saudi Central Bank (SAMA), the number of transactions executed reached about 226.7 million last week, compared to about 238.2 million transactions in the prior week.

Separately, the Kingdom recorded its first current account surplus in nearly two years, indicating an improvement in the Kingdom's external position, supported by a rise in the goods trade surplus that offset the continued deficit in the services balance, according to the latest balance of payments data from SAMA.

The data showed the current account returning to a surplus for the first time in about two years, recording SAR 15.4 billion, driven by an expansion of the goods trade surplus to SAR 113 billion, due to a rise in oil exports to SAR 231 billion, the highest level in two years. Meanwhile, the services balance continued to record a deficit of about SAR 40 billion.

The second-quarter data reflects two contrasting effects on the Saudi current account. On the one hand, the temporary surge in oil prices helped support export revenues; on the other hand, shipping disruptions and higher transport and service costs could increase the services import bill, making the ultimate impact of the crisis on the external balance dependent on its duration and the extent of recovery in trade and energy flows.