Young, wealthy investors in Middle East focus on Islamic assets

Sustainability is also an important component of their portfolios, Lombard Odier survey finds

Wealthy people under the age of 40 are more likely to invest in assets that reflect their values, compared with their older counterparts. Getty

Younger high-net-worth individuals (HNWIs) in the Middle East are more likely to seek investments that reflect their values, such as sustainable and Sharia-compliant assets, compared with their older counterparts, according to a survey by Geneva-based wealth and asset manager Lombard Odier.

About 91 per cent of respondents under the age of 40 said they already invest in Islamic assets, while 88 per cent plan to increase their allocations to sustainable assets, the survey said.

Lombard Odier polled 300 HNWIs, of which 200 were under the age of 40, across the Middle East, including the UAE, Saudi Arabia, Kuwait and Oman. The respondents have a net worth of least $1 million in investable assets.

“[There is] a consensus emerging between older and younger investors in several areas, but specifically in values-based investing,” said Arnaud Leclercq, partner holding prive and head of new markets at Lombard Odier, said on Wednesday.

“The next generation’s enthusiasm for Islamic and sustainable investing … is very encouraging.”

In May, a separate survey by Lombard Odier found that 85 per cent of HNWIs in the Middle East intended to increase their exposure to environmental, social and governance (ESG) and sustainable investments.

Global sustainable inflow funds slowed in the third quarter of this year, attracting $22.5 billion of net new money, down from $33.9 billion in the second quarter, financial services research company Morningstar said earlier this month.

Meanwhile, 73 per cent of respondents to the current Lombard Odier poll believe they can generate improved returns through ventures that drive the transition to a net-zero economy, while 74 per cent say new business opportunities will be found in sustainable sectors in the region.

Adherence to Islamic principles is also a key area of focus for younger HNW investors, the survey said.

“While the families of 85 per cent of young respondents share traditional Middle Eastern values based on religious or cultural principles, 31 per cent say those traditional values are updated for the present day,” Lombard Odier said.

“This contrasts with older investors, 79 per cent of which say their values are exclusively traditional.”

Younger and older investors also differ in their approach to preserving and growing their wealth, according to the survey.

About 45 per cent of investors aged under 40 have a greater focus on improving their lifestyle and remaining wealthy compared with 16 per cent of investors over 40, who are more interested in their financial and reputational legacy, it said.