Challenges and Opportunities we see in Private Equity in the Middle East (MENA) Region

Private equity in the MENA region is a relatively new phenomenon, although it has been an attractive funding avenue for international firms for decades.

Since the oil shock of the 1970s, petrodollars have found their way back into the West, often as investments in private equity funds. The investors ranged from wealthy merchant families in Kuwait and Saudi Arabia to the nascent sovereign wealth funds of the region. There are many family businesses based in the Gulf, and many have made direct principal investments in companies or are even limited partners in private equity firms. Yet for some time the region was mainly known as a good place to raise funds, not to do deals.

Initially, most of the surplus capital was invested in local equities and property, but gradually some found its way into the region’s embryonic private equity funds. When oil prices later began to soar they caused capital to gush into the Gulf at an unprecedented rate, and private equity rose sharply in popularity. Now, there are nearly 100 funds focused on the region that have raised close to US$20 billion in capital, according to Preqin, a private equity data provider.

Continue Reading: Ziad K Abdelnour

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