GCC Investors Prefer Direct Investments

62% of investible assets are direct.

May 25, 2011

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dubai middle eastIt’s generally quite hard to come by information on the investment behavior of SWFs in the Gulf. So, the 2011 Middle East Asset Management Study by Invesco — which seeks to understand the “preferences” of these investors — is worth a quick read. In particular, I was surprised to see the extent to which GCC investors prefer direct investments compared to their expatriate counterparts. According to the study,

“GCC investors allocate 62% of their investible assets to direct investments…Put simply, GCC investors access their investments directly rather than using more diversified ‘fund’ structures.”

Put another way, the Invesco study finds that GCC investors are generally uninterested in the sorts of funds that asset managers, such as Invesco, provide. Now that’s not something you’d expect to see in an asset manager’s research report. Interesting. Anyway, for some details on how Invesco conceptualizes the SWF landscape, see this chart (click image to enlarge):

swf-breakdownThis post originally appeared on the Oxford SWF Project

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