Qatar Central Bank Governor H E Sheikh Abdullah bin Saoud Al Thani (third right), Abdulla Mubarak Al Khalifa (second right), Acting Group CEO of QNB; Joseph Abraham, Group CEO of Commercial Bank, and other CEOs and dignitaries at the opening session on
Qatar’s asset management industry is expected to witness sharp growth over the coming years as there is a huge untapped market potential the country and concerned regulatory authorities are offering all needful support by putting the needful framework to develop and boost the industry, echoed most of the speakers at an event yesterday.
The current market size of Qatar’s asset management industry is relatively small given the country is one of the richest in the world and the country has huge number of high net worth individuals and surplus income.
But despite all the favourable conditions, the combined value of the industry, according to available data, remains low with only about QR46bn worth of assets under management in Qatar. “Currently there are eight asset management firms operating in Qatar, six QFC-licensed and two operating under the regulation of Qatar Central Bank. One more registered by QIC, is expected to begin operations by the first quarter of 2019,” Chirag Doshi, Executive Vice-President, Head of Investments and Treasury, at Qatar Insurance Group, told The Peninsula on the sidelines of ‘The Euromoney Qatar Conference 2018’, which concluded yesterday.
Doshi added: “There is an untapped potential and great opportunity for the industry to grow in Qatar. It is not only the government or regulators, but event the large private sector and public sector enterprises, such as QIC and QNB, need to come forward to help develop the industry in Qatar.”
He said that generally most of the asset and fund managers of the world are either the offshoots of banks or insurance companies. And QIC and QNB, being the largest insurance and banking service providers in the Middle East and North Africa region, can contribute significantly in developing the industry.
QIC has recently registered a subsidiary at Qatar Financial Centre to grow and develop the local market rather than going to some established centres like London, Singapore and Hong Kong.
The company, established with an initial capital of QR1.8m, will be named Epicure Investment Management or any other name that is approved by the Qatar Financial Markets Authority (QFMA). “The new company will carry out investment business consultation, which is expected to be operational by early next year”, said Doshi.
Doshi was one of the participants at a panel discussion themed ‘Managing Qatar’s wealth’. The other speakers included industry experts Ajay Kumar, AGM, Asset Management, QNB; Louis Lavoie, Managing Director, European Mezzanine, Crescent Capital Group; and Talal Samhouri, Head of Asset Management at Amwal, one of Qatar’s fast growing fund managers. The discussion was moderated by Richard Banks, Consulting Editor, Euromoney Conferences.
During the discussion panelists exchanged views on building the local asset management business, the role of the government and sovereign institutions; and the prospects of domestic growth or international diversification. They also provided insight on what should investors be doing at the end of the cycle. Most of the participants agreed that the development of a strong regulatory framework and trust are very essential elements to establish a vibrant asset management industry, which has been evolving for over the last one and a half decades.
Ajay Kumar (of QNB) noted that his firm has registered exponential growth over the last few years and see more business opportunities arising in the coming days with higher energy prices and accelerated economic growth. He said that top 10 percent of the QNB clients represent over 50 percent of the assets under its management, which poses some types of challenges. He also said that banks compete by offering high deposit rates which is another issue for the fund managers do take into account. Kumar also noted that the global economic and financial crises in 2006 and 2009, and the blockade created several obstacles and challenges, but at the same time they also created opportunities; and all that created a sense of diversification, both in terms of asset class and geographical region.
