Gulf Family Businesses as a Distinct Asset Class

Family businesses are the largest part of the Gulf's private economy. According to the UAE Ministry of Economy and Tourism, they represent nearly 90 percent of private-sector companies in the UAE, about 60 percent of GDP, and more than 80 percent of employment (Milner, 2025). Yet their economic importance is not reflected in a distinct institutional investment category. Investments in family businesses are generally classified as public or private equity and assessed using the same frameworks as other companies.

This note argues that Gulf family businesses should be recognized as a distinct asset class. There are three reasons.

First, family businesses share a distinctive combination of characteristics: concentrated family ownership, a long-term approach to decisions, and a close link between the family's reputation and the company's conduct. These features influence investment, borrowing, and growth, and can be assessed systematically.

Second, a supporting legal framework is taking shape. The UAE issued Federal Decree-Law No. 37 of 2022 on family businesses, followed by a unified register and a framework for family charters (Milner, 2025; United Arab Emirates, 2022). Saudi Arabia's Companies Law of 2022 allows a binding family charter (Salloum, 2022). Oman offers tax incentives to family and private companies valued above RO10 million that list on the Muscat Stock Exchange (Oman Observer, 2024). These developments give family governance a more formal, enforceable foundation.

Third, many Gulf family businesses are approaching a generational transition. Transferring ownership can make access to long-term capital and a stable investment partner particularly important.

Recognizing family businesses as an asset class would require three practical steps: a clear definition of eligible companies, a benchmark that measures their collective performance, and explicit allocations by long-term institutional investors supported by common governance standards.

The potential benefits extend to families, investors, and national economies. Families could gain access to patient capital and a more orderly path through succession. Institutional investors could gain exposure to businesses that account for a large share of the private economy. In turn, this could deepen capital markets and strengthen private companies.

At I3H Investment, we invest in and develop enterprises for the long term. We believe family businesses deserve to be understood and assessed in light of their distinctive characteristics.

An earlier version of this argument appeared in Arabic on Mufakiru Al Emarat (ECSSR), July 2025 (Abualreesh Almansoori, 2025).

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