Saudi AUM hits record $295bn, on track for $500bn by 2030: S&P Global

29/09/2025 03:26 AST

Saudi Arabia's asset management industry grew 12 percent annually from 2015 to 2024, with total assets reaching nearly $295 billion by the first quarter of 2025, according to S&P Global.

In its latest analysis, the credit rating agency noted that the Kingdom's asset management sector is set to maintain its upward trajectory, supported by robust growth in local capital markets.

This momentum reflects a regional trend, with total assets under management across the Gulf Cooperation Council rising 9 percent to $2.2 trillion by the end of 2024, according to Boston Consulting Group.

BCG identified Saudi Arabia and the UAE as the main drivers of retail mutual fund growth, while Kuwait and Abu Dhabi's sovereign wealth funds accounted for the largest share of regional assets.

Commenting on the latest report, S&P Global Ratings Credit Analyst Timucin Engin said: "We expect AUM (in Saudi Arabia) will continue to increase at a healthy pace. This is due to ongoing regulatory efforts and continued growth in debt and equity markets, as well as the increasing availability of exchange-traded funds, real estate investment trusts, and other retail and institutional products."

Key drivers of growth
According to S&P Global, Saudi regulators are working to boost the sector's appeal among both local and global investors. Initiatives include expanding the institutional investor base, introducing new retail and institutional products, and strengthening domestic asset classes.

Authorities also aim to position the Kingdom as a hub for regional and global capital flows, attracting international fund managers and market institutions.

"The development of domestic capital markets forms an important part of Saudi Arabia's economic diversification. Their expansion could also contribute to the financing of Vision 2030," said Benjamin Young, credit analyst at S&P Global.

The agency further noted that the rise of Saudi ETFs listed abroad should improve liquidity in secondary markets, as these instruments attract both institutional and retail investors internationally.

In July, Saudi Arabia's Capital Markets Authority published amendments to investment fund regulations to improve transparency, disclosure, risk management, and investor protection.

Among other changes, public funds are now able to invest in privately placed debt instruments, which could benefit the emerging private credit sector in the country.

In April, another report by Fitch Ratings said that Saudi Arabia's asset management industry grew by 20 percent year on year in 2024, pushing the sector's total assets to SR1 trillion ($266 billion) for the first time.

Fitch added that the industry is expected to continue attracting steady inflows through 2025 and 2026, with assets under management projected to exceed SR1.3 trillion.

According to Fitch, key drivers of growth include a growing investor base, favorable demographics, ongoing economic reforms, strong capital markets, and digital transformation initiatives.

In its latest report, S&P Global said that Saudi Arabia's AUM will continue to increase at a healthy pace and has the potential to exceed $500 billion by year-end 2030, subject to market conditions.

"Our expectation is based on the assumption that AUM will continue to increase by 10 percent annually until 2030, compared with 12 percent over the past decade. The increasing issuance of debt and money market instruments will likely lead to a gradual increase in the proportion of fixed income instruments as an asset class," said S&P Global.

It added: "While this is a high-level estimate, we note that sector growth also depends on market conditions and that actual growth could deviate from our expectations."

Private vs public funds
S&P Global's breakdown shows private funds account for roughly 50 percent ($148 billion) of total AUM, followed by discretionary mandates at $96 billion and public funds at $51.5 billion.

Real estate, a very popular asset class in the GCC, contributes almost 50 percent, or $72.2 billion, to Saudi private funds' AUM, followed by equities.

As of March 31, 2025, equities accounted for about $47.4 billion, or 49 percent, of Saudi discretionary portfolio mandates' total AUM.

In the discretionary mandates portfolio, public funds' asset allocation is more balanced, with about 31 percent in money market instruments, 25 percent in equities, and 13 percent in debt instruments as of the same date.

The report added that public fund subscribers rose to nearly 1.6 million in March 2025, from about 265,000 in June 2013, with about one-third investing in real estate investment trusts.

Broader Impacts
A well-developed asset management industry could provide Saudi Arabia's young and growing population with access to more diversified savings and investment products, encouraging higher long-term saving rates.

"The development of capital markets is intended to form an important part of the country's economic diversification, which, in turn, could reduce oil-related economic and fiscal volatility. Their expansion could also contribute to the financing of Vision 2030," said S&P Global.

It added: "From a sovereign credit perspective, deep, diversified, and transparent domestic capital markets can provide multiple advantages. Ultimately, their sustainable development can provide an important source of financing for economic agents and facilitate effective monetary policy."

S&P Global further said that the development of Saudi Arabia's capital markets through regulatory initiatives and improving market liquidity contributed to the Kingdom's upgrade to 'A+' from 'A' in March 2025.

At the time, the credit rating agency noted that the ongoing social and economic transformation in the Kingdom can help boost activity in construction, logistics, manufacturing, and mining sectors, prompting GDP growth over 2025-2028.

Global context
Despite its rapid growth, Saudi Arabia's asset management sector is still in the early stages compared to global peers.

The report highlighted that Luxembourg, Singapore, and Ireland are established global fund domicile centers, while asset management expansion in other countries often stems from domestic factors.

It also noted that Ireland has emerged as Europe's go-to ETF hub, currently accounting for about 70 percent of the EU's AUM in ETFs.

"Similarly, Singapore has become a regional and global investment hub. Among other factors, it also offers strategic access to the Asian headquarters of many global financial institutions," said Ivan Tan, credit analyst at S&P Global.