The UAE was a clear winner in the GCC region last year when it came to financial wealth. The wealth of the Emirates grew by 20% compared to global growth of 11%, with a net inflow of 200,000 millionaires.
In a report titled "Global Wealth 2022", BCG revealed that global wealth reached $473 trillion in 2021, $7 trillion of which was in the GCC.
Mustafa Bosca, Managing Director of and Partner at BCG, said the UAE saw a net inflow of 200,000 millionaires in 2021, contributing to 30% of the GCC’s financial wealth and 10.2% of that of the Middle East and Africa.
“2021 has established UAE as a clear winner in the GCC, and one of the fastest growing markets globally,” Bosca said while launching the report on Wednesday.
The report said the UAE financial wealth was at $0.7 trillion in 2021 and is expected to have a compound annual growth rate (CAGR) of 6.7% to reach $1 trillion by 2026.
Crypto, Green investments
It also highlighted blockchain, crypto and sustainable investments as areas in which wealth managers and banks will focus efforts on the coming years.
Crypto gains reached $162 billion globally last year, with a CAGR of 67% year-on-year, with exponential growth expected in crypto assets, said Bosca.
He added that 75% of institutions have already bought or are planning to buy crypto or digital assets, with decentralised finance wallet holdings growing by 30 times in the last two years and $3.2 billion worth of trade.
Sustainable assets will also see strong growth across the board globally, reaching $82 trillion, growing to $111 trillion over the next five years, much faster than the growth of total financial wealth, he said.
“This will spread heavily around listed shares and investment fund shares, around 6-7% on securities,” he said.
The UAE is well positioned to win in both crypto and climate related wealth opportunities, with major digital asset companies and exchanges setting up in the UAE, thanks to a crypto-friendly environment and emerging regulatory set up, he said.
“COP 28 is going to happen in the UAE next year, which we believe will further establish UAE as a location for sustainable investments,” he said.
(Reporting by Imogen Lillywhite; editing by Seban Scaria)