[ I N D E P T H | M I D D L E E A S T ]
Why the Middle East is an untapped oasis for custodians
The Middle East is no longer just a rising market – it ' s a melting pot of opportunity for custodians, with sovereign wealth funds managing trillions, capital markets booming and economic diversification in motion. From record-breaking IPOs to a surge in alternative investments, Sophia Thomson examines how the custody industry is evolving in the region – and why success depends on tailor-made solutions and lasting relationships built on trust.
The Middle East has long been a region of immense financial potential, but in recent years, it has drawn heightened attention from global custodians. Like an oasis hiding in plain sight, its markets – once an overlooked frontier – are now firmly on the radar of international financial institutions. While global custodians have been active in the region for years, interest has intensified in recent years amid sweeping market reforms, evolving regulatory frameworks, and ambitious economic diversification efforts. With local sovereign wealth funds gaining influence and capital markets modernising at a swift pace, demand for sophisticated asset servicing solutions is rapidly growing. Developments in the Middle East, Saudi Arabia and the United Arab Emirates( UAE) are at the forefront of this transformation. Saudi Arabia’ s Vision 2030 is reshaping the kingdom’ s financial ecosystem, with a clear focus on reducing oil dependency, attracting foreign investment, and overhauling market infrastructure to encourage a more dynamic and competitive economy. This ambitious initiative has already spurred major reforms, such as easing
" The Middle East is undergoing constant transformation. Every time someone visits after a year or so, they see significant changes – not just in the economy but also in industries like manufacturing.”
KASHIF KHALID, HEAD OF MIDDLE EAST AND AFRICA, NORTHERN TRUST foreign ownership restrictions, expanding capital markets, and developing new financial hubs to diversify the economy and create new growth avenues. Alex Krunic, senior advisor to the chairman of Commercial Bank of Kuwait, observes:“ Exposure to the Middle East from a foreign investor perspective is growing. It ' s becoming a lot more relevant in every portfolio manager’ s investment horizon.” The region’ s growing importance to global investors is evident as they begin to see the Middle East not only as a market of opportunity but as a critical component of their investment strategies. This shift is driven by the region’ s economic growth, its strategic geopolitical positioning and the influx of investment-friendly reforms.
Trends in the region The Middle East’ s financial sector is booming, with assets under management( AUM) in the region growing by 13 %
36 Global Custodian Spring 2025