Wealthy individuals in the Middle East and Africa saw the value of their assets rise by 9.1 percent to $4.8 trillion in 2012, a study by the Boston Consulting Group (BCG) showed, as strong economies and rising equity markets fuelled regional growth.

If current trends continue, wealth in the region could rise to $6.5 trillion by 2017, said the survey, published on Tuesday.

Global wealth managers have flocked to the region in recent years, lured by its rich energy and commodity reserves, relatively higher economic growth and rising population.

At the same time, Middle Eastern investors are becoming more comfortable investing domestically even though the percentage of assets held off-shore is relatively high, said Markus Massi, partner and managing director at BCG. Wealth held in equities grew by 18.3 percent in 2012 in the region, the survey showed.
Equity
"You see less money getting invested in outside jurisdictions but this can change pretty quickly if political conditions worsen," Massi said.

Private banks like Julius Baer and Sarasin Alpen, now compete with Credit Suisse, J.P. Morgan Chase and UBS in the region. Royal Bank of Canada expects to double the number of wealth management employees in its Dubai office in the near future, and is open to opportunities for acquisitions, a senior executive said last year.

But only those offering unique investment products and catering to specific asset classes are gaining traction among Middle Eastern investors, said Massi.

High net worth individuals in the Gulf Arab region continue to allocate heavily on cash and prefer regional stock markets when they invest in risky instruments, the report said.

The Gulf Arab region ranked highly among countries with the highest percentage of millionaire households with Qatar leading the global list with 143 millionaires out of every 1,000 households, the study showed. – Reuters