Sama said the move is part of its initiative to encourage foreign direct investment “to increase competitiveness of the sector and utilise the potentials of the Saudi economy”.

“Enabling international entrants will enhance the quality of provided services, increase diversification of investors and introduce unique business models to the market,” the central bank added.

Cigna is the first foreign insurance company to be allowed to set up shop in Saudi Arabia.

Jerome Droesch, chief executive of domestic health and health services at Cigna International Markets, said: “I am very proud to share that Cigna Worldwide Insurance Company received an official branch licence from the Saudi Central Bank to operate as a health insurer in the Kingdom of Saudi Arabia (KSA).

“This is a milestone moment for us and represents an exciting step along our growth journey in the kingdom and the region. I would like to thank Sama for their support in our mission to be able to offer quality healthcare and exceptional service to the citizens and residents of KSA.”

Filings published on the Saudi Exchange show the Riyadh-based company bought SAR 1.06bn (£233m, $284m, €277m) worth of shares in Phoenix Group – which has a market cap of £6.4bn.

London Stock Exchange documents currently show that KHC holds a 3.35% stake as of 27 July 2022.

International Adviser asked Phoenix Group about the investment and the figures – but it declined to comment.

Share price in Phoenix Group has risen since the announcements to £6.45 from £6.26 – but share price is down 5.67% for the year.

The conglomerate said that the investment is a continuation of KHC’s strategy to invest in blue-chip companies that are considered “market leaders in their field”. It recently acquired a 6.8% stake for £224m in UK-listed fund group M&G.

KHC is majority owned by Bin Talal, the Saudi prince and billionaire, who was targeted in a corruption crackdown in 2017. A well-known Wall Street investor, Bin Talal has investments in JD.com, Uber, Lyft and Twitter via KHC. He also owns a meaningful stake in Citigroup, having first invested in the bank in the 1990s.

In May, he sold 16.8% of his stake in KHC to Saudi Arabia’s sovereign wealth fund, the Public Investment Fund. A grandson of the first Saudi Arabian monarch, King Ibn Saud, Bin Talal is nephew to former ruler King Abdullah Saud who died in 2015.

Rise of the Phoenix

Phoenix Group has been very active in the M&A market over the last few years with its biggest deal coming in 2018 with the acquisition of Standard Life Assurance for £3bn.

At the time, the deal involved a strategic partnership with Standard Life Aberdeen, now Abrdn, which became a leading shareholder in Phoenix – as it is now at 10%.

Then, in 2021, Phoenix sold its Standard Life Assurance UK investment platform-related products, which include the Wrap Sipp, Onshore Bond and UK Trustee Investment Plan, to Abrdn for a cash consideration of £115m.

In return, Phoenix acquired the whole Standard Life brand – effectively ending the 2018 partnership agreement. But the two firms will re-entered into a 10-year strategic asset management partnership, which will see Phoenix leveraging the portfolio management and investment strategy capabilities of Abrdn.

In 2020, Phoenix Group revamped its long-term savings and retirement business into two divisions ‘open’ and ‘heritage’.

The company was in talks to sell its European operation in 2021 – but discussions failed to materialise into an agreement. But it did sell its subsidiary Ark Life Assurance Company to Irish Life Group in the same year.

Filings published to the London Stock Exchange on 20 July 2022 show the Riyadh-based company bought SAR 1bn (£224m, $266m, €262m) worth of shares in the FTSE 100 firm.

KHC said the investment was in line with its strategy of backing global market leaders and “diversifies [its] exposure in new and promising sectors”.

M&G declined to comment on the investment.

KHC is majority owned by Bin Talal, the Saudi prince and billionaire, who was targeted in a corruption crackdown in 2017. A well-known Wall Street investor, Bin Talal has investments in JD.com, Uber, Lyft and Twitter via KHC. He also owns a meaningful stake in Citigroup, having first invested in the bank in the 1990s.

In May, he sold 16.8% of his stake in KHC to Saudi Arabia’s sovereign wealth fund, the Public Investment Fund. A grandson of the first Saudi Arabian monarch, King Ibn Saud, Bin Talal is nephew to former ruler King Abdullah Saud who died in 2015.

Performance

M&G’s share price rose 1.4% to £2.15 on Thursday morning before drifting back down to £2.13. Compared to peers, which have suffered steep share price losses, shares in M&G are up 2% year-to-date.

Confirmation of a £500m share buyback programme has helped, as has its attractive dividend yield, with investors desperately hunting for income.

M&G chief executive John Foley said, including dividends, the group has returned £1.8bn to shareholders since de-merging from Prudential in 2019.

The company  reported £370bn worth of assets at the end of 2021, broadly flat compared to the year before. Its retail funds continued to suffer redemptions, with clients pulling £3.8bn, though this was an improvement on 2020 when redemptions hit an eye watering £11.9bn

Its interim results are due out on 11 August.

For more insight on UK wealth management, please click on www.portfolio-adviser.com

Boston Consulting Group’s latest report, ‘Global Wealth 2021: When Clients Take the Lead’, outlines the prospects wealth managers have to grow their businesses.

First, the interesting figures and facts.

The UAE’s wealth management segment remained resilient and recorded growth in the face of the pandemic-induced economic slowdown.

Its financial wealth has grown by a compound annual growth rate of 3% from 2015 and about 70% of this financial wealth is investable wealth. Half of country’s wealth is owned by individuals whose net worth exceeds $5m (£3.6m, €4.2m).

The UAE, which represented 26% of the GCC’s financial wealth in 2020, is expected to witness strong growth of 4% CAGR to reach $700bn by 2025, a $100bn increase from 2020.

“The UAE’s individual financial wealth reached $600bn in 2020 despite the pandemic impacting the local economy. Although the pandemic posed many challenges, the UAE’s wealth segment has proven to be resilient in the face of adversity, hence the growth it has recorded,” Mustafa Bosca, managing director and partner at BCG, said in the report.

Globally, despite the covid-19 pandemic’s enduring financial impact, global wealth grew throughout the crisis and is likely to continue to expand significantly over the next five years in line with the emerging economic recovery.

The GCC’s financial wealth is forecast to reach $2.7trn in 2025 from $2.2trn in 2020.

Onshore asset allocation shows that equities and investment funds, at 47%, accounted for the largest portion of assets in 2020.

The allocation of onshore assets is set to change slightly by 2025, with currency and deposits expected to take the larger share of onshore assets amounting to 47% of the overall onshore asset class in the UAE.

Big role for UAE

The UAE is projected to play a much larger role in global wealth management. The country has the potential and the infrastructure to manage a much larger share of overseas wealth in the country.

“In the years ahead, we will see more global wealth getting managed in the country,” Bosca said in the report.

Saudi Arabia and the UAE together account for 71% of the financial wealth within the GCC with Saudi accounting for 45% of this followed by 26% by the UAE and 11% each by Qatar and Kuwait.

In the GCC, 66% of the financial wealth is held by millennials and cash represents 46% of this.

What is there for wealth managers?

The UAE is emerging as a leading cross-border wealth management centre with $500bn of overseas wealth managed in the country in 2020.

The country became the sixth largest offshore asset booking centre.

Switzerland, with $2.4trn in overseas wealth managed there, is the top global jurisdiction that attracted the largest chunk of foreign wealth, followed by Hong Kong, Singapore, the US and the Isle of Man.

Tailor offerings to local needs

“Nationwide wealth has been distributed to more members of the population, and, likely, client demands and expectations will also shift as wealth demographics continue to experience change,” Mohammad Khan, Partner at BCG, said in the report.

“As such, those responsible for local wealth management will be tasked with tailoring their offerings to local needs or younger wealth segments with heightened proactivity in due course.”

Target the young and rich

“Investment advisers have a good news in the form prospective clients, the next generation affluent and high net worth clients,” said Ajay Mehta, director, Vision Ventures.

“These individuals, between 20 and 50 years of age, have longer investment horizons, a greater appetite for risk, and often a desire to use their wealth to create positive societal impact as well as earn attractive returns.

“Wealth managers should be ready with their strategy to enroll these ultra-rich and young clients.”

The branch will allow Saudi Arabian clients to benefit from an extended wealth management offering which is comprised of lending services, foreign exchange and treasury products, account management and deposits.

Clients will continue to be able to access the existing range of local and international trading capabilities as well as investment banking services.

Majid Al-Gwaiz will act as chief executive of the Riyadh branch and will be responsible for driving the strategy, building upon business area initiatives and developing local solutions to serve high net worth and ultra-high net worth clients, family-owned companies, government and government-related entities and Saudi corporations.

He is chief executive of Credit Suisse’s commercial banking activities in Saudi Arabia after joining from Al Rajhi Bank, where Al-Gwaiz was a general manager in corporate banking.

‘Key growth market’

Bruno Daher, chief executive of Middle East and North Africa at Credit Suisse, said: “I am excited to begin this new and important chapter in Saudi Arabia as we expand in this key growth market and invest in ways to better serve our clients in the region.

“Under Majid’s leadership, we look forward to building on and enhancing our current market position while providing an integrated banking experience for our high net worth individuals and institutional clients in Saudi Arabia.”

Credit Suisse has had a presence in the Middle East since 1967 and has been operating in Saudi Arabia since 2005.

The offering has been granted through the local Saudi Central Bank (SAMA).