Mercer, the investment consulting branch of US services company Marsh & McLennan, anticipates that its wealth division will at least double its assets under management (AUM) in the Middle East. This growth is expected to continue despite current economic challenges. Yasir AbuShaban, a principal at Mercer Wealth based in Dubai, stated that the company aims to increase its AUM in the region from the current $1 billion to between $2 billion and $3 billion over the next two to three years.

AbuShaban explained that this projection serves as a conservative estimate, adding that they see significant opportunities for growth in the region. Mercer does not make direct investments; instead, it allocates clients’ money to professional asset managers while also providing advisory services. He noted that the firm possesses considerable negotiating power, which allows them to secure lower fees for their clients than those clients could achieve on their own.

The clients of Mercer Wealth include a variety of entities such as sovereign wealth funds, family offices, and insurance companies. Operating from its Dubai office, Mercer also oversees operations in Africa, India, and Turkey, where similar growth opportunities are identified.

According to a report from Boston Consulting Group (BCG), wealth creation in the Middle East and Africa (MEA) rose by 8.5 percent to $8.1 trillion last year, up from $7.5 trillion in 2015. This growth rate surpasses the global average of 6 percent and ranks as the second highest growth among regions, following Asia-Pacific, which saw a 9.9 percent increase. BCG forecasts that MEA wealth will rise to $12 trillion by 2021, with an average annual growth rate of 8 percent.

BCG attributes the drivers of wealth generation in this region to an even split between new wealth creation and the performance growth of existing assets. Additionally, AbuShaban highlighted a trend where clients increasingly seek a comprehensive approach to investing. He noted that institutional investors and some families are adjusting to a slowdown in available capital, which leads them to optimize their portfolio management strategies.

In light of the low interest-rate environment, some clients have shown a greater willingness to take on risk. This has led to an increased interest in illiquid assets like private equity and infrastructure. AbuShaban remarked that there is a growing desire for higher returns, particularly in a low-return environment that includes various fixed-income investments.

He emphasized that the appetite for risk has risen, especially in areas like private equity, infrastructure, and private debt, where clients anticipate higher returns from investments that require a longer commitment of capital. The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, indicated in its 2016 report that it has gradually increased its involvement in direct private equity and private credit transactions, particularly in Asian markets like China and India.