Money managers under the microscope
By Dunny P. Moonesawmy, Head of Fund Research for Lipper in Western Europe, the Middle East and Africa. The views expressed are his own.
Spare a thought for the fund managers trying to make their business work in the Middle East and north Africa (MENA) this year.
Those investing in home markets have faced the uncertainty and drama of the Arab Spring and the wear and tear on affected markets. The Egyptian Stock Exchange was closed for several months while in the Gulf Cooperation Council (GCC) countries, all markets ended the first half in the red (even if the Abu Dhabi index and the Saudi Tadawul All Shares resisted well, down 0.57 percent and 0.67 percent respectively.)
Moreover, the fund industry in the region faces some deep structural flaws.
Taking the GCC alone, there are 101 fund management companies in the region managing $28.5 billion of assets between them, according to Lipper data. Those firms run a total of 337 funds with average assets under management at $84 million; taking a median figure to iron out the inflating effect of a few bigger funds that figure is just short of $20 million. To see a graphic showing AuM by asset class in the GCC, click here.
By Merieme Boutayeb, Research Analyst at Lipper. The views expressed are her own.
The first half of 2011 has been a tough ride for investors. Disaster in Japan and the ongoing euro zone debt crisis have sent markets reeling, but perhaps the most telling long-term impact will come from the so-called Arab spring.