Dubai: Growing numbers of Middle East investors, especially the high networth individuals (HNIs) from the Gulf states, are investing in Asian emerging markets as part of their portfolio diversification, according Chris M. Meares, HSBC's Global Head of Private Banking.

"There is clearly a shift taking place in the investment trend in the Gulf. Prior to 2001, Gulf investors preferred to keep most of their investments in the US and Europe. Then came the big surge in investments within the Middle East region. Although the inward investments into the region continue to grow, there has been a growing number of investors taking exposures in emerging markets in Asia and private equity opportunities around the world," Meares said.

Although private equity is a relatively new phenomenon, he said the region has a big number of sophisticated investors who are keen to take advantage of private equity opportunities around the world.

Among the emerging markets, China, India and other Far Eastern markets top the investment destinations of Gulf Investors, while growth opportunities in Europe and US are also actively pursued.

Appetite

"There has been a significant increase in the risk appetite of Middle East investors with more seeking growth-oriented portfolios than traditional ones. While private equity and hedge funds are becoming popular, there is huge interest in Asian opportunities."

Real estate continues to attract a big chunk of Middle East investments in Europe and UK. "Within the Middle East, there is a huge demand for real estate in the private portfolios. This trend is likely to continue as regional economies continue to experience big growth and domestic liquidity," Meares said.

Mideast critical to HSBC private banking

The Middle East accounts for about 10 per cent of HSBC Private Bank's wealth management business.

With close to 200 people employed in the region in wealth management, HSBC's private banking business, headquartered in the Dubai International Financial Centre, is its second largest private banking hub within the group.
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