Private equity activity in the Middle East and North Africa (MENA) region has more than halved in the first half of 2008, replicating the depression in markets across the globe.
According to a report in Emirates Business 24/7, just 12 investments were made across MENA in the first half of 2008, compared with 33 in the same period of 2007.
In addition, fundraising was down. The average fund size in 2007 was US$274m, with a total of US$6bn of capital raised in the entire year, compared with US$2.4bn in 2005. The largest closing in 2008 to-date has been NBD Sana Capital’s US$500m fundraising.
However, Imad Ghandour, executive director of Gulf Capital, suggested that this was “merely a pause after a three-year spring”. He added: “There are many happy investors reaping the fruit of their patience: 12 announced exits in the first half, including the maestro exit of Egyptian Fertilizers Company at US$2.5bn in one year and the US$432m IPO of Depa.
“Mega deals, almost a daily event in 2006 and 2007, are a rare and shy species nowadays,” said Ghandour. “The attractiveness of private equity as a viable investment class at a global level was in doubt. Yet the fundamentals that led to the rapid rise of private equity back in 2005 are even stronger.”