Desire to diversify leads investors to North America and Europe
Qatar’s investors have the highest target returns on investments in the GCC at 21 per cent. The finding, published in a report by US-based investment management company Invesco, looks at the behaviours of institutional and retail investors within the GCC. Saudi Arabian and UAE-based investors have a more balanced target return at about 10 per cent.
“We see among GCC investor groups that the wealthier they are the more aggressive they are likely to be,” says Nick Tolchard, head of Invesco Middle East.
Sovereign wealth funds (SWF) across the GCC account for 44 per cent of global SWF flows, representing over $1 trillion in assets. Only 6 per cent of these assets are focused on local development investments.
There is a shift towards investing in developed markets. In 2010, 64 per cent of SWFs preferred investing in emerging markets, but this has dropped to 25 per cent for 2011.
“Investors in the GCC viewed themselves as emerging markets, so were comfortable with investing in other emerging markets. There is now greater interest in looking into developed markets as these opportunities are cheap,” says Tolchard.
According to Tolchard, the shift has more to do with building a better diversification strategy than the political unrest in the region.
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