The World in 2024: how we see the global trends in the wealth sector and why it matters

Background by David Bell

I have been travelling to Dubai since 2014. During that time, there has never been more excitement or interest in the UAE or neighbouring private wealth centres like the Kingdom of Saudi Arabia, Bahrain & Kuwait.

In a world of global uncertainty, the economic firepower of the KSA, combined with the political will to propel the country forward make it a tantalising prospect for professional advisors.

In this short note below, I explain what I have observed and why it matters for your private wealth business. In future editions of this newsletter, we will develop the global themes looking at Asia, UK & Europe and the US. Stay tuned for more!

We will be returning to Dubai on Thursday 7 November and Riyadh on Tuesday 12 November.

Part 1: The Middle East

The business class cabins of the world are an unlikely, but reliable, bell-weather for oncoming trends in global economic wealth and politics. Today, major airlines flying to cities such as Riyadh, Doha, Abu Dhabi and Dubai have some of the busiest business class lounges in the world as the centre of economic gravity continues to shift to the east.

While this realignment of global influence has been underway for a while, the nature of the shift has become more nuanced over time and the Middle East is emerging as a pivot point in the power play between the east and the west

In recent years, globalisation and a unipolar world (dominated by a single superpower) has given way to a multipolar landscape in which several global powers are operating simultaneously. In this multipolar world, the three key regions of influence (the US, EU and China) are diverging on key themes and in terms of how they operate. The Middle East is increasingly assuming the role, not only, of a meeting point between the three regions, but also as a fourth pole in its own right, in what has been, until now, a three-polar landscape.

Private wealth is among the many industries where this new global dynamic is manifesting visibly. The wealth management industry has endured a challenging few years, characterised by falling assets under management across the world. The Middle East, however, has stood largely alone in bucking this global trend, generating more wealth in 2023 than in any other period in its recent history.

Middle East: Retaining Capital, Attracting Talent

Powered by accelerating GDP, wealth creation in the Middle East continues to outpace that of the rest of the world. However, the most interesting element of this dynamic is that the wealth being generated is staying firmly within the region. Where once, capital was exported to the likes of Europe, UK and the US, today, more private wealth professionals from the west are relocating their operations to the major cities of the Middle East as talent is flowing toward the money rather than the money leaving the region, as has historically been the case. Recruitment into the private wealth sector has soared across the region, as have the number of Shariah-compliant financial houses and products.

As 2024 unfolds, the Middle East is poised to reinforce its stance as an increasingly important hub for global wealth. Among the many factors driving this shift are changes in global trade dynamics. These changes are most notable with regards to China, the region’s largest trading partner, as well as India and Japan which remain principal buyers of Gulf crude.

PCD Dubai 2023 Highlights

Economic Renaissance: UAE and Saudi Arabia Lead the Way

Saudi Arabia and the UAE have enjoyed significant financial gains from surging energy prices since 2022, resulting in significant petrodollar windfalls. As a result, both countries hold some of the world's largest and most active sovereign investment funds and have taken on an opportunistic, flexible and transactional approach to how they deal with the rest of the world.

Setting the pace for the region’s burgeoning economic ambitions, the governments of Saudi Arabia and the UAE have recently introduced several pro-business policies aimed at making their respective economies more attractive to global corporates, investors and wealthy families. In an effort to encourage more foreign direct investment, the UAE has been robustly implementing far-reaching business and legal reforms that have included relaxing laws governing foreign investor participation in onshore private companies.

These initiatives appear to be paying off as the UAE attracted more foreign direct investment (FDI), than anywhere else in the region accounting for 32.4% of overall inflows in 2023. 2024 is likely to see this trend continue as more family offices and HNW/UHNW individuals from across the world set-up bases and invest into the country. Dubai, in particular, has benefited greatly from being increasingly seen as a seamless gateway into the high-growth markets of the east.

Along with Saudi Arabia, the UAE is aggressively diversifying its economy away from oil in search of longer-term growth and stability. In accordance with this ambition, the UAE is making technology and supercomputing an investment priority. The Abu Dhabi Investment Authority, the world’s third-largest sovereign wealth fund, has launched a centre dedicated to cutting-edge research in data science, artificial intelligence, machine learning and quantum computing.

Saudi Arabia’s efforts to diversify its economy have been equally robust. It recently unveiled its Vision 2030 plan outlining a programme of reforms aimed at supporting innovation across non-oil sectors, attracting foreign investment and creating opportunities for local and international firms. The nation’s government clearly recognises the importance of foreign investment to its economic diversification ambition. As a result of these policies, Saudi Arabia is fast rising up the ranks as an attractive destination for global investors.

As part of these overall ambitions, the country is also seeking to establish fresh trade links with key markets across the world, including the UK. Total trade in goods and services (exports and imports) between the UK and Saudi Arabia was ￡17.1 billion in the four quarters to the end of Q2 2023, an increase of 32.8% or ￡4.2 billion from the four quarters to the end of Q2 2022.

As it asserts its new-found economic and political confidence on the world stage, the Saudi Arabian government has sought to acquire stakes in iconic British brands including Selfridge’s department store and Aston Martin. Other private Saudi investors are increasingly investing in real estate across the UK.

Away from the UAE and Saudi Arabia, other countries in the region are visibly flexing their economic muscle. For example, the oil-rich nation of Qatar is reported to be investing ￡4bn to create a green energy research and development campus in the UK.

As the Middle Eastern economies embark on this important new chapter in their economic and political story, their nearest superpower and the East’s dominant economic force is closing the book on a decade of seemingly unstoppable growth.

Be part of the story by joining us at events this November to meet professionals on the ground dealing with key decision makers.

For information about our plans in KSA for 2024, follow the link below:

HNW Advisor Riyadh 2024