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resilient in 2024, driven by privatisation efforts and economic diversification," Echague explains. " Looking ahead to 2025, we expect this momentum to continue, supported by government initiatives, rising foreign investor interest, and new listings in high-growth sectors such as technology, healthcare, and renewable energy. This isn’ t just an IPO boom – but a call for transformation of the entire investment ecosystem. Governments in the region are actively encouraging foreign participation, creating a deeper, more liquid market for institutional investors. Kashif Khalid, head of Middle East and Africa at Northern Trust, also points to technology as another key force reshaping the region: " One of the biggest drivers is technology – both in how it ' s being integrated operationally and how it ' s being invested in. AI, in particular, is a major focus, with massive funds being launched – some reaching $ 100 billion." From SWFs to private investors, AI and digital infrastructure are shaping investment strategies across the region. Rather than just adopting AI, the Middle East is actively driving its growth, channelling significant resources into its being established.” This kind of structural change is also reflected in how investors allocate capital. While the region has long been a growth market, alternative investments are now taking centre stage. Private equity and private capital are surging, driven in part by the current cost of capital. But perhaps the most striking change is the rise of onshoring. " Historically, institutional investors placed their wealth abroad for returns. Now, however, more asset managers are setting up locally, and capital is being deployed within the region to support local economies, projects, and giga projects," Khalid explains.
Regulation Looking at regulation within the region, several changes and market reforms are reshaping the financial landscape, such as the introduction of central counterparties( CCPs) and the broadening of the investment product suite with new asset classes such as derivatives and sustainabilitylinked bonds( SLBs). Additionally, the relaxation of foreign ownership limits aims to attract more foreign capital. Echague says: " We are witnessing a
“ Asset owners and managers in the Middle East differ from those in other regions in their preference for long-term, relationship-driven partnerships and a greater emphasis on capital preservation and risk management, especially in family offices and SWFs.”
CHRISTIANE EL HABRE, REGIONAL MANAGING DIRECTOR, MIDDLE EAST, APEX GROUP advancement. Another big shift? Consolidation. Khalid points out how SWFs are pulling their portfolio companies closer, fuelling further expansion. And it ' s not just finance – sectors like manufacturing are also feeling the impact of these changes. Khalid adds: " 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. For example, we ' re now seeing local car manufacturing plants surge in public listings across the GCC markets. This trend is underpinned by transformational changes to infrastructure which are attracting more foreign investment, boosting liquidity, enhancing operating efficiency, and reducing risks for investors.” These regulatory advancements are particularly significant for custodians, as they create new opportunities to service both domestic and foreign institutional investors. The introduction of CCPs enhances market stability, while the diversification of investment products
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