Impact investing and ESG are growing in interest among retail clients in the Middle East, with financial services provider Ocorian saying they are experiencing “significant growth.”
The company said this is due to a generational shift taking place in the region.
However, this has caused a “generation gap” between families. The next generation of individual clients are leading this growth in her ESG investing, taking a very different approach from her parents and grandparents.
According to Okorian, the next generation of family members is not only considering completely different types of investments, from ESG investing to cryptocurrencies, but also transforming their own family businesses to become true advocates for ESG and sustainability. I want more and more to become a person.
Traditionally, families and ultra-high net-worth individuals who hold assets outside the Middle East tend not to build their wealth domestically, but for the first time, there has been a significant increase in the use of foundations for domestic construction.
As part of this, the foundation schemes at Dubai International Financial Centre, Abu Dhabi Global Markets and RAK International Corporate Center have increased dramatically, with 550 foundations registered with Ocorian as of September 2022.
Okorian says this is also a generational shift, with the next generation of families becoming more aware of the need for asset protection and financial security. He added, “With the increasing sophistication of family governance, there is a growing awareness of the need for structuring.”
Next-generation family members also have a growing desire to professionalize their family offices. Alongside investments, family offices are now used for wealth protection, inheritance, and intergenerational planning and governance.
Linda O’Mahoney, Global Head of Business Development for Ocorian’s Private Client Division, said: – everything from their investment outlook, impact investing and his ESG uptrend, to how they are structured, to their family office specialization.
“These new trends are very exciting, but they can also pose new challenges, such as ensuring investments meet both target returns and desirable ESG certifications.”
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