Thursday, June 1, 2023

Middle-East PE boom defies fundraising slowdown



A boom in Middle-Eastern deal-making has seen more than $14bn invested in 64 buyouts so far this year, a record according to data provider Preqin.

Against a slowdown in fundraising globally as interest rates continue to rise, the oil-fuelled expansion of sovereign wealth funds has contributed to bumper private equity activity in the region.

Of the 57 deals, the UAE’s Mubadala (24) and Abu Dhabi Investment Authority (15) lead the way, followed by Saudi Arabia’s PIF (12), the Investment Corporation of Dubai (3) and ADQ (1).

In a sign of the mounting interest, the Adia SWF of Abu Dhabi recently raised its target private equity investment target from 5-10% to 7-12%.

“Private equity groups are seeking well-heeled SWFs from the Gulf to fund buyouts, helping to offset higher financing costs,” said Preqin in its report.

“SWFs are also increasingly partnering with private equity groups that harness specific expertise across sectors.”

SWFs in the region have doubled their exposure to alternatives to 44% this year in pursuit of non-traditional investments to boost returns.

Tap into hedge funds and private markets with Alternative Fund Insight’s free weekly email. Sign up here

Featured image: diana.grytsku