Saudi Arabia’s asset management industry is expected to exceed $400 billion in 2027, Fitch Ratings said, as private investment funds expand and domestic demand supports growth despite volatile financial markets.Assets under management reached approximately $370 billion in the first half of 2026, an increase of 20 per cent from a year earlier, according to the ratings agency. The total represented about 27 per cent of Saudi gross domestic product, compared with 23 per cent a year earlier.
The industry is the largest among Gulf Cooperation Council countries. Fitch expects further expansion as investment opportunities broaden, regulatory changes encourage participation and foreign institutions establish a stronger presence in the kingdom’s capital markets.
Private funds accounted for 55 per cent of managed assets after recording annual growth of 31 per cent. Real estate and equities were major contributors, while family offices helped sustain demand for privately managed investment vehicles.
Discretionary portfolio management, under which managers invest on behalf of individual clients or institutions, represented another 27 per cent of industry assets. Public investment funds accounted for the remaining 18 per cent, having expanded by 19 per cent over the year.
Bashar Al-Natoor, global head of Islamic finance at Fitch Ratings, said growth was likely to continue because of stronger investor demand, regulatory progress and increasing foreign participation. He identified geopolitical instability, fluctuations in oil prices and changing interest rates as risks to the outlook.
The figures indicate that private investment vehicles are taking a larger share of the market, although public funds and individually managed portfolios remain significant. The distribution also underscores the importance of property and equity markets to the industry's performance.
Foreign institutions have increased their commercial presence. International and regional capital market firms accounted for 18.5 per cent of industry revenues in the second quarter of 2026, compared with 12.5 per cent in 2024, Fitch said.
That increase in revenue share does not necessarily imply equivalent foreign ownership of Saudi securities. Overseas investors held about 12 per cent of freely tradable shares on the Saudi Exchange’s main market at the end of October, according to figures cited in the industry assessment.
Foreign holdings of domestic government debt reached 14.7 per cent in the first half of 2026, compared with 4.5 per cent at the end of 2024. The change points to growing overseas involvement in the kingdom’s fixed-income market alongside its established domestic investor base.
Saudi authorities widened access to the main equity market in February by removing qualification requirements that had previously restricted direct participation by certain foreign investors. The changes were intended to broaden market access and encourage investment across a wider range of listed securities.
The Capital Market Authority also proposed stricter disclosure requirements for investment funds in October. The proposed measures aim to improve transparency and investor protection as the number and variety of investment products increase.
Separate figures for the investment fund segment showed assets reaching approximately 1 trillion riyals, equivalent to $266 billion, at the end of June, a year-on-year rise of 28.2 per cent. The number of investment funds increased by 29.6 per cent to 2,249. That fund-only measure is narrower than Fitch’s industry-wide total, which also includes discretionary portfolios.
Islamic finance remains a substantial component of the sector. Sharia-compliant funds dominate the exchange-listed mutual fund market, while sukuk provide investment opportunities for managers seeking fixed-income exposure consistent with Islamic financing principles.
Fitch said 96 per cent of the Saudi Exchange entities it rates carry investment-grade ratings, with an equal proportion assigned stable outlooks. Almost all Saudi sukuk rated by the agency are also investment grade, supporting the availability of higher-rated domestic securities.
Local bank-affiliated investment managers continue to occupy a leading position, even as international competitors gain business. Their established customer relationships and access to domestic savings remain important advantages in attracting money to managed investment products.
The industry nevertheless remains sensitive to changes in securities valuations, financing costs and investor appetite. Property-focused private funds, equity portfolios and fixed-income holdings can respond differently to market conditions, leaving managers exposed to distinct sources of volatility.
Fitch’s assessment follows an earlier first-quarter reading of more than $340 billion in managed assets, when private funds held roughly 54 per cent of the market. The subsequent increase in their share suggests that this segment continued to outpace other management categories during 2026.
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