The Middle East and North Africa’s (Mena) private equity industry (PE) is poised for significant growth led by the GCC’s six member states in light of intensified Mena-wide economic diversification and development efforts, according to a report titled Challenges and Opportunities: Reinforcing the Private Equity Market in the Mena Region released by Orient Planet Research.
The International Monetary Fund (IMF) has projected that Mena will become the third fastest-growing region in the world over the next five years.
A number of factors are making the region highly attractive to PE investors, including the regional governments’ strong initiatives to strengthen local entrepreneurship and promote small- and medium-sized enterprises. In addition, the region’s young demographics, increasing wealth, and recent important economic reforms are making it highly attractive to PE investors whose investments can help drive development and advance MENA’s position in the global stage,” said Nidal Abou Zaki, Managing Director, Orient Planet Group.
Mena’s PE market is still at its infancy compared to other well-established ones such as the US but many PE players are showing strong interest in the region. The report found that the UAE and Saudi Arabia received the bulk of PE investments in 2014 at more than 75 per cent of investments by value, while Egypt, Jordan, Tunisia and Lebanon carved a niche after accounting for 10 or more deals in 2015.
“The potentials of private equity investments in the Middle East and North Africa are enormous, and so are the challenges. But also it is important to highlight how the market is currently progressing in order to address current roadblocks that hinder success.