MENA Buyout Deals, Fundraising Slow in 2015 Amid Oil’s Decline

  • From a 6-year peak in 2014, value of deals fell 4 percent
  • Total assets by MENA PE industry climbs to $26.5 billion

The value of private equity deals in the Middle East and North Africa fell 4 percent in 2015 as economic growth slowed because of the decline in oil prices.

Investment dropped to $1.5 billion, although the number of private equity deals in the region surged to 175 from 72 in the previous year, the MENA Private Equity Association said in a report on Sunday. Fundraising in the year declined 19 percent to $992 million, with cumulative assets under management totaling $26.5 billion.

"The fundraising environment has remained challenging given the impact of economic headwinds and geopolitical factors on external investor perceptions," according to the report. "However, fund managers have continued to be creative in their approach to sourcing capital and the deal-by-deal model continues to gain traction across the region."

A 50 percent plunge in oil prices over the past two years is hurting economic growth across the six-nation Gulf Cooperation Council, which is home to about 30 percent of the world’s oil reserves, and slowed dealmaking. This led investment focus to shift away from oil and gas to consumer-driven industries such as retail, healthcare, food and beverage, and education, according to the report.

Among the region’s key deals last year were Abraaj Group and TPG Capital’s purchase of a stake in Saudi restaurant chain Kudu and an investment led by Standard Chartered Private Equity in Jordanian tissue manufacturer FINE.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE