Deals and fundraising decline in MENA private equity market

Graph downThe number of known private equity deals in the Middle East and North Africa region fell to 66 in 2013, down from 101 the previous year, according to a new report.

Meanwhile, the known amount raised for private equity investment in the year fell to $744 million from $863 million in 2012, according to the report by the MENA Private Equity Association, which is based on Zawya Private Equity Monitor data.

Although the results may disappoint investors in MENA private equity, the report authors say the decline in deals is in line with other global regions, particularly those in the eurozone.

It also claims that “from our experience of the market, key private equity players in the region have stepped up fund raising efforts”, particularly in the last quarter of 2013 and the first quarter of this year.

“The ongoing global macroeconomic challenges, driven primarily by the continuing uncertainty in Europe, has created a difficult fundraising environment,” says the report. ” However, there are some positive signs that the fundraising community in the MENA region remains optimistic.”

These optimistic signs include the announcement of $2.6 billion of funds in 2013, an increase of $800 million compared with the announced funds in 2012.

The report authors concede some limitations to the data in their survey. For instance, market practitioners estimate that up to 30% of private equity deals are unannounced, and of those that are announced, about 30% do not publicly disclose their size.

The report adds that investors are increasingly deploying private equity funds on a deal-by-deal basis, instead of launching specific funds, and says “deal-by-deal deployment of funds is not captured in our data set”.

©2014 funds global mena

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