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Saudi Arabia’s asset management sector grew through the war. Total assets under management (AUM) exceeded USD 340 bn by end-1Q 2026, up 17% y-o-y and 4% q-o-q, now equivalent to about 26% of GDP compared to 23% a year earlier, according to Fitch Ratings, which expects AUM will surpass USD 400 bn by 2027.
Why it matters: The numbers suggest that institutional confidence in the Saudi market held even at peak geopolitical stress. International and regional firms are taking an increasing slice of that growth, capturing around 20% of industry revenues in 1Q — up from roughly 15% in mid-2025.
Where the money went: Private funds drove growth, accounting for 54% of AUM — up 26% y-o-y — split mostly between real estate (54%) and equities (30%). Public funds grew 20% y-o-y, led by money market products. Discretionary portfolio management was the exception — AUM fell 0.4% y-o-y, the one segment moving backwards.
Local equities held up, and foreign flows tell the story. Total market value rose around 7% y-o-y by end-May despite war-related volatility. Foreign participation ticked up too, with overseas investors accounting for 44% of total buys and 37% of sells in the week ending 11 June — up from 34% and 30% at end-2025. Foreign ownership stood at 12.6% of freefloat, up from 12.4%.
The debt side was less steady. Foreign holdings of local-currency government bonds fell to about 8% of outstanding domestic issuance in 1Q — down from 12% in 2025, effectively giving back the gains from 4.5% in 2024 as geopolitical sentiment weakened. However, Saudi Arabia’s planned inclusion in JPMorgan's Government Bond Index Emerging Markets in 2027 is expected to improve liquidity and draw fresh inflows and reverse the slump.
The regulatory pipeline is doing its part. The Capital Market Authority has proposed cutting minimum capital requirements for custody by 60%, opened capital markets to foreign investors, approved simplified investment funds, and begun regulating robo-advisory services — all aimed at lowering the bar to entry while the sector has momentum.
What to watch: The US-Iran agreement could ease conditions further, though Fitch notes it may still be delayed or followed by renewed instability. The bigger date on the calendar is the JPMorgan index inclusion in 2027, as that’s when passive allocators show up.
