The war in the Middle East has triggered the migration of wealth, assets and asset-servicing capabilities out of the region to other financial centres.
Speaking on Bloomberg Radio recently, Laurent Ramsey, managing partner of Pictet Group and chairman of Pictet Asset Management, warned asset owners that “if you try to trade on the news flow, you’re bound to lose money”.
Boston Consulting Group estimates that the Gulf Cooperation Council or GCC region had around US$2.2 trillion of assets under management in 2024, the most recent figures.
Patrick Akiki, partner and financial services market leader at PwC Switzerland, says money began to move out of the GCC region as soon as hostilities broke out, with several large international banks as well as wealthy families starting to diversify and spreading out their assets and capabilities.
According to Hubertus Väth, managing director for Frankfurt Main Finance, “we are already observing initial movements and have been approached by interested parties”. However, he notes that the prevailing sentiment at present seems to be for diversification rather than full-scale relocation.
Olivier Vigna, chief executive officer of Paris Europlace, observes that “over the past several months, uncertainty has increased significantly in certain regions, accelerating asset reallocation and diversification”, and that the European Union is already benefitting from the trends because its environment “is stable and predictable”.
According to news reports in March, some 30,000 British residents in the United Arab Emirates have left the region, with Dubai affected most. Many of these are expected to take temporary refuge rather than relocate longer term.
“Switzerland is the main European beneficiary,” says Akiki.
Europe’s capabilities
The EU’s asset management industry has doubled over the past decade, and currently has over $23.5 trillion of assets under management. The UK manages over $16.35 trillion, while Switzerland manages more than $4.4 trillion.
Major financial centres in Europe should have more than enough capacity to support Middle Eastern assets and investors. They also offer differentiated facilities and services.
“Some locations, such as Frankfurt, provide a safe haven environment, access to deep capital pools, and a strong pipeline of investment opportunities,” says Väth. “Others, like Milan or Zug, are attractive due to favourable tax regimes, while cities such as Lisbon and Madrid appeal primarily for their lifestyle.”
Transfer of asset servicing capability is also under way. Several financial institutions continue to establish a presence in Paris, according to Vigna, drawn by the size of the local and EU financial sector, proximity to major corporations, the talent pool, and the quality of domestic supervisors.
The movement of capabilities as well as assets from the Middle East has mostly been occurring with family offices, especially larger multi-family ones, says Akiki. “For the single-family offices it’s more complicated,” he says, adding however that even these are looking to start diversifying by teaming up or expanding their business abroad.
Actual relocation is a different matter. He says this is a less popular option for now, given that it could take between two and six months from initiation to execution.
Advertising attractions
Many financial centres, including the UK, spotted the trend early and have done their best to publicise their attractiveness.
In fact, news reports from a year ago noted that many wealthy British individuals living in the Gulf had fled to take up temporary residence in Ireland, France, and other jurisdictions until the end of the UK’s 2025-26 tax year in April to avoid tax bills.
The UK tax system has varying entitlements for the number of days that citizens can stay in the country without having to pay tax.
Väth says that many European financial centres have established one-stop agencies to support migration of assets and redomiciling, among other things. In Frankfurt, “comprehensive support programmes and tailored welcome packages are in place to facilitate a smooth transition for firms and talents alike”.
Ramsey emphasises the importance of trust and reliability in serving private clients, areas in which Switzerland has excelled, along with the ancillary services valued by high-net-worth clients.
“Switzerland offers the white-glove service for wealth management for financial and non-financial services,” Akiki says.
In his view, the country’s solid financial and regulatory infrastructure and its reputation for political stability and neutrality all stand it in good stead to continue to be the major pole of attraction for Middle Eastern assets heading into Europe.
According to Ramsey, the level of trust in a country’s government and institutions will also be important in its attractiveness to high-net-worth investors. From this perspective, countries with strong populist pressures like the UK and France may find themselves disadvantaged.
Germany and other countries are likewise looking to shore up their reputation for stability and political reliability. “In today’s increasingly turbulent global environment, we believe our value proposition has rarely been more compelling: stability, reliability, and the assurance of a strong, well-established legal system – a truly safe pair of hands,” Väth says.
According to Vigna, the current level of instability elsewhere “reinforces our commitment to the integration of capital markets within the European Union. Doing so will generate even greater economic growth and collective prosperity”.
