GCC’s Uber Wealthy On An Investment Spree – Survey

High net worth individuals (HNWIs) in the GCC region are more focused on growing their wealth rather than preserving it, according to the Emirates Investment Bank (EIBank) chief executive.

“The region’s HNWIs are investing aggressively and there seems to be more appetite and less concern for risk,” said Khaled Sifri, CEO of EIBank.

“Most studies done globally suggest that HNWIs adopt a more conservative view is adopted by the HNWIs on investment but this region seems to be less conservative.”

This is in line with a new study by EIBank on the region’s ultra rich, which found that around 90 per cent of the GCC’s HNWIs are more focused on wealth generation than preservation.

The study, which polled 80 HNWIs in the Gulf to gauge their investment attitude, found that nearly 64 per cent of them preferred to invest in assets closer to home as their confidence in the regional economy rose.

Sifri also noted that the GCC’s wealthy were focused on high returns as they increasingly invested in non-liquid assets.

According to the study, the majority of the HNWIs invested across a range of assets with 34 per cent allocating wealth in their own business while 25 per cent preferred to invest in real estate. Out of this, two thirds expect to increase their investment in these fields in the near future, the survey found.

The UAE, China and Europe were the preferred destinations to invest over the next three to five years.

The study also indicated a rising optimism among the HNWIs regarding investment opportunities in the regional economy as opposed to the global stage. Around 87 per cent of the HNWIs are optimistic about the regional economy over the next five years.

Nearly 54 per cent of those polled said that the current global economic condition will remain the same while almost 46 per cent believe that it will improve in a year.

However, those investors who have been affected by the global economic downturn, seemed to be cautious about future investments, the study said.

Around 38 per cent are now more conscious and cautious of the risks related to their investments while 21 per cent have restricted or reduced their global investment activities and 13 per cent have focused on investments in the Gulf region.

Almost half of those whose investments have been affected by the Arab Spring were found to be reluctant to venture into affected countries though their views differed depending on the country being considered, the study said.

The survey also analysed the behaviour of the region’s wealthy investors when choosing a banking partner. Around 59 per cent of respondents said that they preferred a local bank to help manage their wealth while a large majority found investment banking advisory services important.