State Street will open its first office in Abu Dhabi after finding ‘optimism about the economic outlook for the region’ from institutional investors.
The location will be its second in the United Arab Emirates, and will indexed, overlay, multi-asset and active investment management, along with global custody, accounting, risk and performance analytics, and securities lending.
State Street released research concurrent with its new office announcement showing that 78% of institutional investors are optimistic about their own growth prospects in the Middle East.
In addition, 75% foresee growing inflows into Gulf Cooperation Council (GCC) domiciled funds over the next five years.
“To find this level of concurrence and optimism among major institutions is unusual,” said Liz Nolan, chief executive officer, EMEA, State Street and chairperson for State Street Global Advisors, EMEA. “The results show there is an almost universally positive outlook and prediction of growth in MENA. Having had a presence in the region for more than a quarter of a century, we have a unique perspective on the institutional investor community, and their positive outlook mirrors our own.”
Within the MENA region, State Street’s research found that 91% intend to diversify their portfolios to historically complex asset classes including: emerging market equities, hedge funds, and infrastructure.
Furthermore, 42% said they will increase their allocation to exchange traded funds (ETFs); and almost three quarters believe there will be growth in demand for funds which are led by environmental, social and governance (ESG) considerations.
“The strong endorsement by State Street demonstrates its confidence in the exciting prospects and opportunities offered by Abu Dhabi and the region,” said Richard Teng, CEO, Financial Services Regulatory Authority, ADGM. “Their branch office attests to ADGM’s strengths as a fast-growing and award-winning international financial centre. We look forward to supporting State Street in its global growth aspirations.”