Sovereign wealth funds to reach $10tr by 2015

Dubai: "Total funds under sovereign wealth fund management will be $10 to $12 trillion by 2015," said Steve Ellis, worldwide managing director of Bain and Company. Today the six GCC states are home to $2 trillion of the present global total $3 trillion of money in sovereign wealth funds.

"This is a tectonic shift in sources of capital for the world's markets," said Ellis, talking to Gulf News explaining why Bain and Company, one of the world's leading management consultancies, formally opened its Middle East office in Dubai yesterday.

The partnership has been busy in the region since 1993 and has taken on 60 projects. Today it has 30 staff in the region, and is headed by Jean-Marie Pean, managing partner of Bain Middle East.

"We have worked with some of the leading companies in the region," said Pean, listing client categories that include family-owned conglomerates, local companies, multinational companies, selected government institutions and private equity funds.

Bain has worked with some family conglomerates in the region with very diversified portfolios of businesses, and the owners are looking for advice on how to get more focused on the parts of the business that they can take regional, and even global in time.

Bain is focusing its new Middle East office on private equity and sovereign funds, in which sector the firm is the clear market leader. Bain figures show its private equity practice to be four times as large as its nearest competitor, and its considerable expertise is based on the success of Bain Capital.

Bain Capital

"After advising companies for some years, in 1985 the partners decided to put their money where their mouths were, and they founded Bain Capital, which is now one of the industry's leading firms," said Ellis. "Using our expertise from Bain Capital, we have been able to transfer the skills we have in-house for the benefit of our clients," he said.

Bain expects the huge growth in Asia, in particular the emerging markets of India and China, to become a significant target for Gulf money. "So far, Middle East investors have focused on hotels and real estate when they look at Asia," said Pean, "but they should now start to look outside these sectors to others like financial services and telecoms across the whole region, and industry and consumer goods in markets like India and China".

But Bain does not expect all their work to be looking out from the GCC. "We want to educate our global clients about the GCC, both as a very important source of funds which will become more important over time, and also as a place for investment opportunities in sectors like infrastructure and real estate," said Pean.