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Foreword

Dear Friends of the MENA Private Equity Association and Colleagues,


I am much honored to introduce the 8th edition of the Private Equity & Venture Capital in the MENA
Region annual report. Since 2006, this report has presented the state of our industries and overall
economic development in the region. Those of you who have been part of the regions private equity and venture
capital landscapes would likely agree that this period of time represents an eventful part of our professional
lives. We witnessed extraordinary economic development with the cyclical ups and downs of which we are all
aware, as well as a crippling financial crisis that deeply impacted both investors and the regions growth and
development opportunities.
Such challenging circumstances have profoundly impacted the stakeholders in our investment
community, including regulatory bodies, the general public, fund managers, and entrepreneurs. In
particular, these groups have developed a sophisticated view of what actually drives economic value and the role
private investors can play to foster and accelerate the development and growth of companies and industries
to build a sustainable and internationally competitive regional economy. This has led to a fundamental shift in
the relationship between private equity investors and managers. Investors have become more
knowledgeable, and therefore more selective and vocal, and managers have generally adjusted to
accommodate the needs of these more sophisticated investors. As a result, we are continuously gaining
more trust from all of our stakeholders and this is actually the key factor for the long-term success of our
industry.
The MENA Private Equity Association is not only the platform through which we can collaborate and
communicate our efforts, but also the collective voice that conveys the impact of our investment activities
on the regional economy and supports our relationships with other private equity and venture capital
associations around the world. By delivering superior transparency, sharing global best practices, providing
training, and actively participating in regional and global industry discussions, we can guide others on the
path towards sustainable value creation, successful businesses, and healthy returns for investors.
Let us all work together to make that happen and let us actively tap global intellect and resources that will help
us to achieve our goals. Participation in the MENA Private Equity Association, through both engaged
membership and provision of investment data, will shed light on the actual development of our industry in the
Middle East and North Africa. This transparency is critical to regaining the trust and interest of
international investors in deploying capital to our region, which in turn will drive success in fundraising
efforts.
I extend a special thank you to our Director, Lina El Zein, as well as her advisors and service providers who are
tirelessly supporting our cause. Last but not least, we want to thank the sponsors of the MENA Private Equity
Association and, more particularly, of this 2013 annual report.
Sincerely Yours,

The MENA Private Equity Association extends its sincere appreciation to Zawya for sharing
primary data and industry insights that informed this annual report. We are most grateful to KMPG
for developing the report analysis.
KPMG
Brad Whittfield, Associate Director, Private Equity and Sovereign Wealth Funds, KPMG
Charlotte Harris, Associate, KPMG
Vikas Papriwal, UAE Head of Transactions and Restructuring, KPMG
Zuhaib Khan, Assistant Manager, KPMG
Zawya - Thomson Reuters
Ali Arab, Product Manager, Zawya Financial Solutions, Thomson Reuters
Josiane Assaad, Content Manager, Zawya Investment Monitors, Thomson Reuters
Youmna Akiki, Research Associate, Zawya Investment Monitors, Thomson Reuters

Steering Committee
We also thank the annual report steering committee for its valuable input and contributions
towards the development of this report.
Ali Arab, Product Manager, Zawya Financial Solutions, Thomson Reuters
Anthony Hobeika, Head of Research and Strategy, Gulf Capital
Dr. Helmut Schuehsler, Chairman, TVM Capital Group & CEO, TVM Capital Healthcare Partners
Haythem Macki, Partner, Growthgate Capital
Huda Al-Lawati, Managing Director, The Abraaj Group
Imad Ghandour, Managing Director, CedarBridge Partners
Karim Ben Salah, Managing Director, Malaz Capital
Samer Sarraf, UAE Country Head, Amwal AlKhaleej
Media Task Force
We are most grateful for public relations and media campaign support from the following:
Nahed Ashour, Senior Manager Arabic Content and Media, Capital MSL
Sponsors
Without the support of the following generous sponsors, this report would not have been possible.

We also extend our thanks to the thought leadership and survey participants.
4

Sponsor Profile
Abdullatif Alissa Group Holding Company (AAGH)
Headquartered in Riyadh, the Kingdom of Saudi Arabia (KSA), the
Abdullatif Alissa Group Holding Company (AAGH) embodies
success and leadership that have been built on values, forward
thinking, and diversity. Established in the 1940s with a primary
focus in textiles and foodstuff trading, over the past six decades the
Alissa Group has evolved into a diversified conglomerate. Today,
the Alissa Group is considered a pioneer of automotive sales,
service, financing, and leasing in the Kingdom. The group has
diversified interests through its Investment and Business
Development Division (IBDD) from the Middle East to the Far
East, in sectors such as real estate, building materials, consumer
finance, food and beverage, retail, manufacturing, and
services all created to complement the AAGH ecosystem and
enhance stakeholder value.
With a complete separation of ownership and control, built on
best practices and managed by seasoned professionals who
possess an unwavering commitment to quality and service
excellence, the Alissa Group enjoys a respected position in the
Kingdom and is considered the benchmark of a successful,
institutionalized, family-owned conglomerate.
AAGH understands that success comes not from standing still, but
through intelligent diversification and leveraging existing assets.
We believe our next generation of growth will derive from new
opportunities and diversification.
Through the combined power and resources of AAGH, we
provide the experience, expertise, and contacts to help our
investments reach the next stage and beyond.
We understand that every company is unique, as are its
opportunities and challenges. Regardless of the vertical or
moment in time, every successful company has common traits,
such as strong fundamentals, a solid business model, seasoned
management, and long-term vision. We seek great ideas from
various sectors. We keep an open mind and consider unique
opportunities. We strategically invest in new businesses that
complement our existing ecosystem. We do this through organic
development or by inorganic means i.e. by way of mergers,
acquisitions, or partnerships.

Sponsor Profile
Growthgate Capital Corporation is a growth investment
firm that conducts direct equity investments with
an emphasis on mid-sized companies operating in the
GCC and the wider MENA region. Growthgate Capital
is a permanent capital investment firm that was formed
in 2007, and has representative offices in Beirut and in
Dubai. GrowthGate Capital has circa $1.7 billion of
assets-under-monitoring and a shareholder equity of
$450 million.
The founding shareholders of Growthgate Capital
include State-owned
banks,
public
pension
funds,
investment companies, single-family offices
and a group of prominent corporate leaders from the
Middle East region.
www.growthgate.com
Vision. Integrity. Focus.

Sponsor Profile
Investing in Value Creation in Healthcare
TVM Capital Healthcare Partners Ltd. was established in 2009 as a
DFSA-licensed fund manager operating out of the Dubai
International Financial Centre (DIFC), and was the regions first
private equity firm dedicated exclusively to the healthcare sector.
We have established ourselves as a developer of healthcare
business concepts, as well as an investor and leader in building
growth businesses in private healthcare in the MENA region and
India. We focus on companies in the field of healthcare services,
pharmaceuticals, devices, and other hospital-related businesses.
TVM Capital Healthcare Partners strength is the breadth and
depth of our international relationships, our commitment to
quality, transparency, and innovation in the way we do business.
Our strong local presence, excellent investors, and a strategic
global partner network provide a powerful support system for
the entrepreneurs and management teams we back.
We create, invest in, and grow pioneering companies, supported by
partnerships with strong international healthcare institutions
such as the Spaulding Rehabilitation Network (a Harvard
Medical School teaching hospital), Joslin Diabetes Center (an
independent, non-profit institution affiliated with Harvard Medical
School), and Bourn Hall Clinic, Cambridge, UK (the worlds first
in-vitro fertilization clinic).
TVM Capital Healthcare Partners is part of TVM Capital Group,
an affiliation of globally acting venture capital and private equity
firms with an operating track record of 30 years. TVM Capital
Group has financed more than 120 healthcare and life science
companies and has documented its success as a growth capital
investor through 43 initial public offerings from its portfolio.
For more information please visit:
www.tvm-capital.ae
or
www.tvm-capital.com

10

Sponsor Profile
Zawya, a Thomson Reuters business, is the preeminent
source of Middle East and North Africa business
intelligence. Our membership solutions provide unique
content and tools including detailed profiles on public and
private sector companies in the region, unparalleled
reporting on MENA markets, asset classes, and details of
regional projects to provide in-depth analysis for investors
and business professionals in order to make more
informed investment decisions and build profitable
relationships.
Its free news site, Zawya.com, attracts C-level professionals
from the business and finance world providing breaking
news powered by Reuters as well as content from major
regional providers. Zawya.com Arabic offers a broader
selection of news genre for the Arabic speaking
community, reaching graduates up to senior level
managers from across the MENA region. Empowering
entrepreneurs and SME community within the
UAE, BusinessPulse.ae, offers the environment to
support success through its news, featured articles and
business tools designed specifically to guide businesses
through each stage of development as well as inspire
professionals with success stories from across the region.
Through its services, Zawya empowers nearly 1
million professionals with the insight and transparency
they need to conduct
business
effectively
by
empowering
them
to
build profitable
relationships.KPMG is a global network of professional
firms with over 155,000 staff in member firms across 155
countries.
KPMG in the UAE was established in 1974 and has grown
to 750 professional staff led by more than 25 partners,
across 8 offices in the country. We work closely with our
colleagues in offices throughout the MENA region and
across the world.

11

Table of Contents
Important Notice
1.1
1.2
1.3

Basis Of Preparation
Definitions And Assumptions
Data Filtering

KPMG Introductory Message


Private Equity In The MENA Region
3.1 Summary
3.2 Funds
3.2.1 Funds Raised To Date
3.3 Investments
3.3.1 Information Limitations
3.3.2 Investments Made To Date
3.4 Regional Focus
3.5 Sector Focus
3.6 Exits

The MENA Merger And Acquisition Market Over


The Past Decade
Anthony Hobeika, Head of Research
and Strategy, Gulf Capital
Shareholder Activism
Yasser Akkaoui, Chairman/Shareholder Activist,
Capital Concept sal.
Is A Private Equity Partner Beneficial To Your
Family Business?
Khaled Baranbo, Investment & Business
Development Manager,
Abdullatif Alissa Group Holding Company
An open dialogue with the Securities
& Commodities Authority
By Dr. Ryan Lemand, Senior Economic Advisor & Head
of Risk Management, Securities & Commodities Authority
Survey
8.1 Survey of General Partners (GPs) In The MENA Region
8.2 Respondent Profile
8.3 Survey Results

Appendix
9.1
9.2
9.3

12

About The MENA Private Equity Association


Members Directory
Private Equity And Venture Capital Firms In MENA

Important Notice
1.1 Basis Of Preparation
This report has been prepared based on data provided by the MENA Private Equity
Association and sourced from the Zawya Private Equity Monitor.
Historical data was updated from that used in the 2012 annual report to reflect
increased disclosure of information in the market. KPMG member firms have not
initiated any primary research in relation to this draft report and have not sought to establish
or confirm the reliability of the data provided by the MENA Private Equity Association and
Zawya.
The information contained herein is of a general nature and is not intended to address
the circumstances of any particular individual or entity. Although we endeavor to provide
accurate and timely information, there can be no guarantee that such information is or will
continue to be accurate. No one should act on such information without appropriate
professional advice after a thorough examination of the particular situation.
In analyzing and determining the parameters of available data, it has been necessary to
apply certain criteria, the most significant of which are as follows:
Private equity is defined to include houses that have a General Partner/Limited
Partner structure, investment companies and quasi-governmental entities that are run by,
and operate in the same way as, a private equity house.
Venture capital for the purpose of this report is defined as a fund specifically dedicated
to venture capital investments. This includes funds by venture capital firms, and venture
funds under private equity firms.
Funds managed from MENA, but whose focus is to invest solely outside the region,
are excluded from the fundraising and investment totals.
MENA includes Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya,
Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, the United Arab
Emirates, and Yemen.
Investment size represents the total investment (both the debt and equity portions).
However, fund size only considers equity invested, as we have no visibility on debt
exposure by funds.
The fund raising totals are the amounts closed/committed for fund raising funds,
closed funds, investing funds, fully vested funds, and liquidated funds.
Exits are defined to include partial exits, although simple dilutions have not been included.

13

1.2 Definitions and Assumptions


For analytical purposes, we have considered the following types of funds, as defined by Zawyas
Private Equity Monitor:
Announced: Official launch of funds which are yet to commence fund raising.
Rumored: Funds expected to announce their intention to commence fund raising.
Fund raising: Funds that have been announced and are in the process of raising capital.
Investing: Funds that have closed and are actively seeking and/or making investments.
Fully invested: Funds that have invested all capital raised. Some of the investments may have
divested in this stage, but not all.
Liquidation: Funds that have divested all investments and have fulfilled all obligations to shareholders.
1.3 Data Filtering

Region: Statistics are based on the market approach and funds are categorized based on the
intended destination for investments (as defined in a funds announced mandate) as opposed to
where the private equity firm is located. With regard to multi-region funds, we have included
these to the extent that there is a focus on the MENA region. EMPEA methodology includes only
those multi-region funds whose primary intention is to invest in emerging markets. However, the
source data does not provide visibility on primary geographic intention.
Funds established with a specific mandate to invest in real estate are excluded from the
fundraising, investment, and exit totals. The remaining real estate investments relate to funds with
mixed investment mandates.
Conventional infrastructure funds, or funds investing directly in greenfield infrastructure projects
(e.g. bridges, roads, etc.), are excluded from fundraising totals. However, funds that make private
equity investments (determined based on target returns) in companies operating in the
infrastructure sector are included.
EMPEA does not track or report other alternative asset classes, including hedge funds, real
estate funds, and conventional infrastructure funds. In our analysis we have excluded data from
investment-type companies, real estate firms, and sovereign wealth funds.

The primary data sourced from Zawya has been filtered according to the definitions used in the
Emerging Markets Private Equity Association (EMPEA) research methodology. In particular, we
have used the following definitions:
Fund Size: In the case of funds yet to make a first close, or where no close information is available, fund size is equivalent to the target amount, and is noted as such. For funds achieving at least
one official close, fund size is reported as the capital raised to date, while for funds that have made
a final close, the fund size is the total capital raised. All amounts are reported in USD millions.
Rumored funds are excluded.
Currency: Where funds data has been provided in a currency other than USD, exchange rates
applied are from the last day of the month in which each close is reported, e.g. first close
reported in on 15 April 2013 would be calculated using the exchange rate for 30 April 2013,
taken from publicly available sources.
Funds of funds or secondaries are excluded.

14

15

KPMG is pleased to continue its association with the MENA Private Equity Association in, once
again, producing the annual report on the private equity (PE) and venture capital (VC) industries in
the MENA region.
2013 continued to be a challenging year for the PE and VC industries in the region, with signs of a
decline in investment activity evident in the decrease in both the total number of transactions
(101 in 2012 to 66 in 2013) and total value of investments (USD 0.9 billion in 2012 to USD 0.7
billion in 2013). While the industry in general continued to invest cautiously favoring the
non-cyclical and defensive sectors such as oil and gas and healthcare, investors are increasingly
broadening their focus across a range of sectors including food and beverage and
leisure/tourism, which were the two largest sectors of investment by value during 2013. The
information technology (IT) sector continued to experience the most investments by volume
during 2013, although these investments on average are relatively smaller in value than in other
sectors.

Following a period of decline in 2011 and 2012, total funds raised during 2013 decreased from
2012 levels (USD 0.7 billion in 2013 compared to USD 0.9 billion in 2012). While the reduced level of
fundraising in 2012 and 2013 compared to earlier periods is partly reflective of the increased focus
on venture capital and small- and medium enterprise-sized (SME) growth capital
investments, it also reflects the general lack of deal flow in the region as regional PE players
continue focusing on preserving and enhancing value from existing portfolios and preparing for
successful exits. That said, it is encouraging to note that there has been an increase in the total value
of funds announced (although we note that many are yet to close) during 2013, as compared
to the prior year (USD 2.6 billion in 2013 compared to USD 1.8 billion in 2012).
The medium to long-term outlook for the PE and VC industries in the region is positive. With the
ongoing slow down of the more mature markets in the West, the MENA region is likely to remain
a region of opportunity and a hub for PE and VC activity as its strong macro-fundamentals
continue to drive the regions economic road to recovery.
We would like to note that this report would not have been possible without the efforts of Zawya, the
MENA Private Equity Association, and the members of the annual report committee. We are
grateful to them for sharing primary data and industry insights and we
support the efforts of the Association in furthering the interests of private
equity in this part of the world.
Vikas Papriwal
Partner Transaction Services
KPMG
T: + 971 4 403 0300
E: vikaspapriwal@kpmg.com

16

3.1 Summary

The private equity (PE) industry in the MENA region has demonstrated relatively flat performance
in 2013 with a marginal decrease in the number and total value of known investments compared
to the prior year. The fundraising environment also continued to remain relatively challenging
with a decrease in total funds raised during 2013 as compared to 2012.
Similar to many countries outside of the region, in particular those impacted by the Euro-zone
crisis, the total number of investments decreased from 101 in 2012 to 66 in 2013. The average
investment size during 2013 at USD 15 million was broadly consistent with 2012 levels
(USD 16 million) with the continuing focus on venture capital (VC), growth capital, and
SME investments.
Funds Raised & Investments Completed
8,000
7,000

120
7,113

101

100

6,000
5,000

76

75

80

67

67

4,000
3,000

100

93

91

66
58

51

60
46

3,006

40

No. of investments

There is evidence to suggest that market sentiment and investment activity is improving in
countries such as Egypt, which have historically been impacted by the Arab Spring. While Egypt is
yet to see a complete return in the levels of PE activity, it was one of the top three investment
destinations within MENA by value and volume during 2013.

Private Equity In The MENA Region

Funds raised / investment value

KPMG Introductory Message

2,000
1,177

1,000

726

1,224

1,154 1,057
510

863

917

744

1,010

20
0

0
2008

2009

2010

2011

2012

2013

Funds raised (left axis)


Investment value (left axis)
Total number of investments (right axis)
Number of investments with known value (right axis)

Note: For the purpose of illustration, assuming investments without buy size data (ie. 20 such investments
during 2013) are valued at the 2013 average of USD 15 million per investment (for investments with buy
size data), total investments for 2013 will increase by USD 300 million to USD 1,010 million.
Source: Zawya Private Equity Monitor

PE and VC firms in the MENA region continued to favor the information technology (IT) and oil
and gas services sectors, which accounted for approximately 50% of the total number of
investments in 2013. Sectors that were most significantly impacted by the global financial crisis,
such as real estate, construction, and financial services, continued to see low levels of investment
activity in 2013.

17

Continuing the trend seen in recent years, and supported by their favorable demographics, the
United Arab Emirates (UAE), Egypt (despite social unrest), and Lebanon remained popular
destinations for investment in 2013. The Kingdom of Saudi Arabia (KSA) continued to attract the
highest value of investments in both 2012 and 2013 (USD 273 million and USD 110 million,
respectively). Based on our understanding, not all of the deals in the KSA have been made public
and therefore are excluded from our data set. While investment volume in Egypt was lower in 2013
compared to the previous year, we expect investment activity to return to historical levels in the
short- to medium-term.
Sixteen funds were launched during 2013, representing USD 2.6 billion of potential capital. Of the
16 funds announced, two funds successfully closed, raising USD 744 million (27% of the total
announced).
The MENA regions economic demographics remain strong, particularly following various financial
stimulus packages announced by key regional economies, including KSA. Together with a
growing population, continuing consumer spending, and oil prices remaining above USD 100 per
barrel, the regional economy is expected to continue recovering with significant planned
investment in infrastructure, healthcare, and education.

3.2 Funds
3.2.1 Funds Raised to Date
The ongoing global macroeconomic challenges, driven primarily by the continuing uncertainty in
Europe, has created a difficult fundraising environment with just USD 744 million of funds raised
during 2013 compared to USD 863 million in 2012. However, there are some positive signs that
the fundraising community in the MENA region remains optimistic with funds worth USD 2.6
billion being announced in 2013, an increase of USD 0.8 billion compared to 2012.
The reduced level of fundraising may also be partly attributable to the increased focus by many
regional PE players on managing, preserving, and enhancing value within their current portfolios.
Furthermore, fund managers are putting more resources towards exploring exit opportunities in an
effort to realize returns for their LPs.
While the number of funds which successfully raised capital in 2013 decreased compared to the
period 2010 to 2012, the average close per fund increased to USD 74 million (from USD 43 million
in 2012), reflecting an improvement in investor sentiments.

The regional fundraising environment continues to be challenging resulting in a decline in


fundraising in 2013. Following a period of decline in 2011 and 2012, total funds raised during 2013
(USD 0.7 billion) decreased on 2012 levels (USD 0.9 billion). We continue to see a focus towards
funds with a growth capital, VC, and SME investment focus, which tend to be smaller in size
compared to buyout funds, which were prevalent in 2007 and 2008. Successfully raised funds in
2013 had an average close of USD 74 million compared to USD 43 million in 2012.

The total value of funds announced in 2013 (16 funds with a combined ITS of USD 2.6 billion, of
which two successfully closed raising USD 273 million) increased compared to 2012, by USD 0.8
billion. This demonstrates an improvement in investor sentiments in the region and investment
opportunities available in the short- to medium-term. From our experience of the market, key PE
players in the region have stepped up fund raising efforts particularly during Q4 of 2013 and Q1 of
2014. Investors are increasingly deploying funds on a deal-by-deal basis, instead of launching
specific funds. Deal-by-deal deployment of funds is not captured in our data set.
A number of PE funds in the region are nearing the end of their lifecycles. While some funds have
already made opportunistic exits, many are faced with increasing pressure to sell and return funds to
their LPs. There was a decrease in the number of exits completed during 2012 and 2013 (37
combined), compared to a total of 51 during 2010 and 2011. Despite this decline in exit volume,
we expect an increase in exit activity over the next year.

18

8 , 000

7,113

40

7 , 000

36

35

$m

6 , 000

30

5 , 000

21
17

4 , 000
3 , 000

10

2 , 000

726

1 , 000

25

20

20

10
1,224

1,057

863

744

15

No. of closes

To some extent, the flat level of fundraising may be attributable to the increased focus by many
regional PE players on managing their current portfolios. Furthermore, fund managers with legacy
funds dating back to 2008 and 2009 are focusing more on executing exits and realizing returns for
their LPs.

Funds Raised

10
5

2008

2009

2010

Funds raised ($m)

2011

2012

2013

No. of closes

Source: Zawya Private Equity Monitor

From our experience of the market, key PE players in the region have stepped up fund raising
efforts particularly during Q4 of 2013 and Q1 of 2014. Investors are increasingly deploying funds
on a deal-by-deal basis, instead of launching specific funds. Deal-by-deal deployment of funds is not
captured in our data set.

19

During 2013, there were three funds that raised capital of more than USD 100 million. The largest
raised capital was USD 350 million by the ICD Food & Agribusiness Fund, which has a focus on
growth capital.

Cumulative Funds Under Management Since 2000

Cumulative funds ($ m)

25,000
20,000

19,636

20,363

21,586

24,250

23,506

22,643

Out of the major funds that raised capital in 2013, only two funds were announced in 2013 and the
remaining funds were announced prior to 2013 (across 2011 and 2012). Consistent with trends in
the past, the average time taken for PE funds to successfully close from the date of announcement
remains greater than 12 months. Out of the 16 new funds announced in 2013
with a combined ITS of USD 2.6 billion, only two funds recorded a successful close during their
first year, representing 11% of the combined initial target size (ITS) of funds announced in 2013.

15,000
10,000

Funds Raised By Type


8,000

5,000

7,000

Growth Capital
Venture Capital

6,000

2009

2010

2011

2012

2013

$m

2008

Source: Zawya Private Equity Monitor

Balanced Fund
Buyout

5,000

Capital Development

4,000

Cumulative funds under management increased to USD 24.3 billion in 2013.

3,000

The following table details major funds that successfully closed during 2013.

2,000

Distressed
Energy and Power
Mezzanine Capital

726

1,000

Major funds raised in 2013


Fund name

Fund
Manager

Funds raised
in 2013 ($m)

Close

ICD Food & Agribusiness


Fund

To be
Announced

600

350

First
close

Growth Capital

2012

NBK Capital Equity


Partners Fund II

NBK Capital
Limited

Growth Capital

2013

300

195

First
close

Capital North Africa


Venture Fund II

115

103

First
close

Capital Invest

Growth Capital

2011

Samena Special Situation


Fund II (SSSF II)

Samena
Capital

Growth Capital

2011

700

25

Second
close

Gulf Credit Opportunities


Fund L.P. I (formerly
Gulf Capital
known as Gulf Credit
Partners)

Growth Capital

2011

300

20

Second
close

Bidaya Fund

Cairo Financial
Holding

Growth Capital

2012

40

19

First
close

Badia Impact Fund

Accelerator
Technology
Holdings

Venture Capital 2012

25

17

First
close

FCPR Tuninvest
Croissance

Tuninvest
Finance Group

Growth Capital

2013

22

10

First
close

Gulf Credit Opportunities


Fund L.P. I (formerly
Gulf Capital
known as Gulf Credit
Partners)

Growth Capital

2011

300

Third
close

Total

7,115

Investment
Focus

Announcement
year

ITS ($m)

1,223

Pre-IPO
1,057

863

744

SecondaryInvestments
SME Growth Capital

2008

2009

2010

2011

2012

2013

Source: Zawya Private Equity Monitor

2013 continued the trend towards a high proportion of growth capital and venture capital, with all
of the 9 funds successfully closing during the year having a growth capital or VC investment focus.
The rise of growth capital and VC funds from 2011 onwards is a reflection of opportunities being
sought after by fund managers. In an emerging region where returns are characterized by earnings
growth as opposed to leverage, growth capital funds have become increasingly popular due to the
perceived growth prospects yielding higher returns and better value.

744
Note: Gulf Credit Opportunities Fund closed twice during 2013
(combined amounts raised of USD 25 million).
Source: Zawya Private Equity Monitor

20

21

10,000
9,000

Funds Raised By ITS Size

3.3

8,904

3.3.1 Information Limitations

8,000

Market practitioners estimate that up to 30% of PE investments in the region are unannounced.
Furthermore, in some cases where investments are publically announced, PE houses have not
revealed the size of the investment. Approximately 30% of announced investments in 2013 have
not publicly disclosed their size.

$m

7,000
5,687

6,000
5,000
4,000

3,107

3,000

2,874
1,751

1,526

2,000
1,000
2008

Investments

2009

2010

2011

0-499 m

500 -999 m

2012

2013

1000 m+
Source: Zawya Private Equity Monitor

One of the common characteristics of growth capital and VC funds is that their investments tend
to be comparatively smaller minority stake investments. This is reflected in the initial target size
(ITS) of those funds which successfully closed. Funds which successfully raised in 2013 had an
average close of USD 74 million compared to USD 43 million in 2012.

We also note that 2008 to 2012 figures in the current year report will not equal prior year report as
data changes year on year based on new announcements made.
Additionally, in the absence of comprehensive information on financing structures used by PE
houses for funding transactions, we are unable to analyze and comment on the debt/equity
financing strategies used for structuring investments. Hence, deal sizes are reported as total
transaction size rather than equity investment.
3.3.2 Investments Made to Date
Investment Value By Volume & Year

3,500
3,000

Total Active Funds By Volume 2000

2,500

Fully vested
13%

100
75

1,500

67
1,177

1,000

Fund Raising
30%

76

101

100
66

67
58

51
1,154

46
917
210

500
Investing
50%

93

91

2,000

Announced
7%

120

3,006

80
60
40

710

20
0

2008
Invest Value

2009

2010
2011
No. of invests with value

2012

2013

Total no. of invests

Source: Zawya Private Equity Monitor


Source: Zawya Private Equity Monitor

Active funds represent those funds that have been announced and have not yet been fully
realized or wound down. Half of the total active funds are actively investing, with 13% fully
vested and 30% raising capital.

22

The total number of PE investments completed by MENA PE funds has decreased from 101
in 2012 to 66 in 2013.
Despite an overall increase in liquidity in the region, the level has not yet recovered to the 2008
level. Furthermore, the IPO market both locally and globally is yet to see any significant
resurgence. As a result, PE remains a key funding option for companies looking for access to new
capital.

23

Based on those investments with a known value, the average investment size of transactions
completed during 2013 remains broadly consistent with 2012 levels at USD 15 million. As
previously discussed, we have seen an increase in growth capital VC and SME investments, which
are generally lower value, minority interest investments. There has been an absence of large buy
out deals post global financial crisis and this is anticipated to remain the case for the next 12 to 18
months.

While Egypt has seen the largest number of PE investments since 2006 (18%), the ongoing
political uncertainty in the country since 2011 has resulted in a decline in total value of investment
in the country. However, given its strong demographics, the country has maintained its volume of
investment activity (20% in 2013). As the country transitions towards regaining political stability,
PE deal activity and value of investments made are gradually expected to return to levels
experienced prior to 2011.

The table below presents the top 10 investments by size.

The UAE, Egypt, and Lebanon led the number of investments for the MENA region, representing
over half of the total number of investments for 2013, the largest of which being Gulf Capital Equity
Partners IIs investment of approximately USD 50 million in OCB Oilfield Services Free Zone
Company. The UAE continues to be a popular destination for fund managers and, given the size
and dynamic nature of the economy, it is unlikely that this trend will change going forward.

Top ten investments in 2013 - by value


Fund name

Target company

Country

Sector

Fan Milk

Ghana

Consumer goods

Greater than $25m


1. Abraaj Private Equity Fund IV
2. Investcorp Gulf Opportunity Fund I B.S.C.

Leejam Sports Company

Saudi Arabia

Leisure and Tourism

3. Gulf Capital Equity Partners II

Chef Middle East

Qatar

Food and Beverages

4. Gulf Capital Equity Partners II

OCB Oilfield Services Free


Zone Company

UAE

Oil and Gas

5. NBK Capital Mezzanine Fund I

Al Rowad

Saudi Arabia

Education

6. NBK Capital Equity Partners Fund II

Shakespeare and Co.

UAE

Food and Beverages

Total Egypt

Egypt

Oil and Gas

During 2013, 6% of investments involved target companies outside of the MENA region. Turkey
proved to be the most attractive country outside of the region, with 1% of the total number of
investments made in 2013. Turkeys growing population, rising infrastructure spend, stable
political environment, and close proximity to both Europe and MENA has made it a popular
destination for investments.

Less than $25m


7. Beltone Capital Holding for Financial
Investments S.A.E.
8. CedarBridge Partners Fund I

Dreamworks Spa

UAE

Leisure and Tourism

9. Gulf Credit Opportunities Fund L.P. I

Turknet Iletisim Hizmetleri


A.S.

Turkey

Telecommunications

10. Samena Special Situation Fund II

Samena Connect Company

ASEAN

Transport

We understand that while several PE investments took place in KSA in 2013, not all of these deals
have been made public. Therefore, KSA may be under-represented in the data with only 12% of
regional PE investments in 2013.
3.5 Sector Focus

In terms of the individual value of investments, the largest investment with a value of USD 350
million was made by Abraaj Private Equity Fund IV in the consumer goods sector in West Africa.
There were a further five investments in the MENA region with a value greater than USD 25 million,
two of which were in the food and beverage sector. One of these large transactions was in the oil
and gas sector, reflecting the continuing prominence of this sector in the region. The oil and gas
sector continues to attract PE investment, enhanced by aging infrastructure with offshore and
onshore fields requiring maintenance, modification, or an increase in production capacity.
3.4 Regional Focus

7%

Lebanon
Kuwait
6%
5%
Other MENA
9%

Saudi Arabia
7%
Other
13%

Morocco
13%

UAE
15%

Egypt
18%

Manufacturing
10%

Education
3%

Information
Technology
17%

Other
3%

Turkey
4%
Outside
MENA
[9%]

Saudi Arabia
12%

Turkey
1%

Other
6%

Morocco
4%

UAE
20%

Education
1%

Information
Technology
30%

Media
6%
Leisure
6%

Lebanon
18%
Other MENA
8%

Telecoms
3%

Transport
5%
Oil & Gas
9%

Regional Split of Investment


Volume in 2013
Jordan
11%
Tunisia
1%

Investment Volume By Sector in 2013


Manufacturing
3%

Telecoms
4%

Regional Split of Investment


Volume Since 2006
Jordan
Tunisia 7%

Investment Volume By Sector Since 2006

Egypt
20%

Outside
MENA
[5%]

Health care
6%

Other
28%

Transport
6%

Media
4%

Consumer goods
5%
Food & Beverages
6%
Leisure
2%

Food & Beverages


8%
Consumer goods
9%

Health care
9%

Oil & Gas


17%

Source: Zawya Private Equity Monitor


Source: Zawya Private Equity Monitor

24

25

The proportion of investments by volume attributable to the information technology, media,


telecoms (TMT), and healthcare sectors has increased in recent years. Information technology
accounted for 30% of the total investment volume in 2013. It is important to note that the majority of
information technology investments were venture capital in nature (19 out of 20 investments), hence
were smaller in terms of investment value.
Key sectors of investment for the PE firms continued to be the non-cyclical sectors such as oil and gas
and healthcare, which accounted for nearly 26% of the total investments by volume in 2013.
As expected, the sectors most heavily impacted by the global financial crisis, such as
construction, real estate, and financial services, have fallen behind. The challenges faced by the
financial services sector continued in 2013 with reduced level of investments.
While the industry in general continued to invest cautiously favoring the non-cyclical and defensive
sectors such as oil and gas and healthcare, investors are increasingly broadening their focus across
a range of sectors including food and beverage and leisure/tourism, which were the two largest
sectors of investment by value during 2013.
3.6 Exits

The impact of the global financial crisis on liquidity, valuations, and investor appetite has resulted
in longer than anticipated holding horizons for PE investments. As a result, the number of exits
completed during 2012 and 2013 decreased when compared to 2010 and 2011.
As discussed, the PE industry has increased its focus in recent years to maximizing value within
the portfolio through strategic and operational performance improvements. However, while
some funds have already made opportunistic exits, many are now faced with the increasing
pressure to sell down and realize value for their LPs. Therefore, one would expect that as
the regional economies stabilize and liquidity in the market continues to improve, a further
increase in the number of divestments will occur in the short- to medium-term.
Capital markets globally during 2013 started to demonstrate growth in IPO activity. During 2013,
a number of MENA-based companies listed on the foreign stock exchange markets, including Al
Noor Hospital (Ithmar Capital) and Gulf Marine Services (Gulf Capital) on the London
Stock Exchange and Sotipapier (Swicorp) on the Tunis Stock Exchange.
We have focused on analyzing the volume of divestments, as opposed to the value, given that a
number of investments are either unannounced, or when they are announced, the values are
undisclosed.

No. Of Divestments & Exit Value


3,500

40

3,314
34

3,000

30

28

$m

25

21

2,000
17
1,500
1,000

17

17

17

1,804

16
1,180
7

389

500
156
2009

2010

Total value of divestments ($M)

15
10
5

117

2008

20

No. of divestments

2,500

35

2011

2012

2013

No. of divestments

No. of divestments with exit value

Source: Zawya Private Equity Monitor

26

27

The MENA Merger and Acquisition


Market Over The Past Decade

Graph 2: Average M&A Deal Sizes in MENA Over the Past Decade
$283

By Anthony Hobeika, Head of Research and Strategy, Gulf Capital Pvt. JSC

$158

Measured by the announced value of completed deals in the region (excluding buybacks, IPOs, and
rights issuances by public companies), total MENA M&As (Graph 1) reached approximately US$26
billion in 2013, representing one of the most active years in the post-financial
crisis era. This is compared to US$10 billion and US$16 billion of deals closed in the years 2011 and
2012, respectively. In terms of the total number of completed deals, the last five years maintained a
stable performance, at levels slightly lower than the 2008 numbers.

Graph 1: Breakdown of M&A Deals in MENA by Year


Over the Past Decade

422
$18
113

368

$3

$5

2004

2005

$24

368

249

349

2004

2005

2006

2007

2008

2010

Steady recovery
since 2009

$10

2009

2010

2011

%age share in Global M&A Deal volume


%age share in Global M&A Deal value
0.72%

2012

2013
0.30%

Source: Thomson One, Gulf Capital Research

0.18%

2004

This trend of rising deal values and stable deal volumes indicates a resumption of the rise in the
average transaction sizes across MENA (Graph 2). Although below the 2006 and 2007 tickets, the
market is gradually witnessing a comeback of selected large deals.

2011

2012

2013

When benchmarked against the global M&A market, the MENA deal-making activity is on a
long-term growth trajectory and is outperforming many peer regions (Graph 3). However,
when compared to the size of its economy, MENAs M&A market remains relatively small, but
has sufficient room for future growth. The total M&A deals during the period 2009-2013 represent
a mere 3% of the 2013 GDP, compared to a much higher ratio of 13% globally (Graph 4).

0.46%

2007

2009

Source: Thomson One, Gulf Capital Research

0.64% 0.64%

2006

2008

Graph 3: Cumulative %age Share of MENA M&A Deals


in Global M&A Deals Since 2004

$26
321

$16

$13

152

$98
$67

Total deal value (in bn)

80
$22

$146
$89

$76

$217

Steady recovery
since 2009

$128

The merger and acquisition (M&A) market in the MENA region has been on a recovery path since
2009, following a drop from peak levels reached in 2008. During the last five years, the regional
deal-making activity has evolved on many fronts, laying a solid foundation for future growth.

$36
483

Average deal size (in mn)

$267

0.34%

0.38%

0.90%
0.84%
0.87%
0.80%
0.75%
0.72%
0.70%
0.69%

0.65%

MENA
Global

13%

Sufficient
room for
future growth

0.46%

0.39%

Graph 4: Ratio of Total


M&A Deal Values
2009-2014 to GDP 2013

Growing MENA M&A


relative market size

3%

0.21%

2005

2006

2007

2008

2009

2010

2011

2012

2013

Total M&As to GDP Ratio

Source: Thomson One, Gulf Capital Research

Selected geographies have accounted for the bulk of the regional M&A activity during recent
years, with the GCC countries being the most active, and in particular, the UAE. In terms of
transaction values, the Arabian Gulf attracted more than 51% of total M&As during the 2009-2013
period, compared to 34% during the 2004-2008 period. Egypt lost some ground to the benefit of its
peers, however, it remains one of the major recipients. Morocco is a country witnessing
increased activity, which is an indication of its growing economic appeal. In terms of transaction
volumes, the overall picture remains unchanged, with Jordan witnessing important M&A activity at
the lower end of the market in terms of deal size.

28

29

Graph 6: Breakdown of the number of


Deals by Geography

Graph 5: Breakdown of the Value of


M&A Deals by Geography
2004-2008

24%

16%

4%

4% 4%

5%

34%
24%

24%

2005

Noticeable foreign participation,


on a gradual uptrend since 2007

2006

2007

2008

2009

2010

2011

2012

2013

Whether the acquirer is a local or foreign entity, the considerations sought in the regional deals are
largely majority stakes (Graph 10). In fact, while these stakes have averaged approximately 50% or
slightly less during the past years, the percentage owned after successive M&As targeting the same
company was, in most cases, majority. This indicates acquirers intentions to build control over their
target entities.

Agriculture

Pharma.

Wholesale

Power & Water

Insurance

Business Serv.

60%

67%

% owned after deal

80%

758%

4% 4%
2% 3%
2% 2% 1%

3%

Construction

Transport

F&B

O&G

Real estate

Industry

Telecoms

% bought during deal

9%

0%
Financials

Graph 10: Historical Average Acquisition Stakes Per Deal in MENA

2009-2013

Hospitality

9%
6%
5% 5%

Healthcare

2%
Agriculture

Pharma.

Power & Water

Wholesale

Insurance

Hospitality

22%

Source: Thomson One, Gulf Capital Research

2004-2008

Cyclical Sectors are


the largest recipients

2009-2013

3% 2% 2% 2% 2%
1% 1% 1% 1%
Healthcare

F&B

Real estate

O&G

Industry

Telecoms

5%

Financials

19%

9%

Business Serv.

14%
11%

Construction

15%

34%

Graph 8: Breakdown of the Number of


M&A Deals by Industry

2004-2008

Cyclical Sectors are


the largest recipients

Transport

18%

34%

31%

he

2004

In terms of industries, the cyclical sectors have accounted for the bulk of the regional M&As over the
past decade. In particular, the financial, telecommunications, industry, oil and gas, and real estate
sectors are the primary recipients of deals. These segments have witnessed some of the largest
transactions in the market.

20%

37%

rs

Ot

hr
ai

30%

27%

Source: Thomson One, Gulf Capital Research

Graph 7: Breakdown of the Value of


M&A Deals by Industry

40%

41%

43%

38%

3%

Ba

or
oc
c
Om o
an

rs
Ot

Ira

he

r
Qa
ta

A
KS

53%

12%

t
Ku
w
ai

6%

(14% excl.
56% Lafarge/OCI
deal)

61%

13%13%

2%

1%

10%
9% 10%
9% 8%

10%

Ku
w
ai

7%

61%
58%

4%

or
oc
co
M

UA
E

pt

8%

% of total deal value

2009-2013

17%
15%

KS

10% 9%

7%

Eg
y

13%

19%

pt

11%

22%

2004-2008

25%

23%

Eg
y

GCC and some North


Africa Account for the
bulk of M&As

Jo
rd
a

25%

Besides GCC, Egypt, Morocco


and Jordan are active

2009-2013

UA
E

38%

Graph 9: Historical % Share of Foreign Players in Total MENA M&As

68%

73%

70%
60%

0.31%

59%
48%

51%

35%

Building majority stakes are the most


sought in MENA M&A deals

2004

2005

2006

2007

2008

50%

50%

2009

42%

41%
30%

2010

608%
0.49%

2011

2012

2013

Source: Thomson One, Gulf Capital Research


Source: Thomson One, Gulf Capital Research

In an indication of the appeal of the region on the global scene, foreign acquisitions of regional
companies are currently accounting for a large share of the MENA M&As, totaling over the last five
years a cumulative 36% of the value of deals and 29% of the number of deals. On a yearly basis, the
general trend is positive, indicating a gradually growing foreign interest in the region.

30

31

In terms of deal valuations (Graph 11), during the period 2009-13 and based on the available
disclosed data, a large number of MENA transactions managed to close at a premium to peer
emerging countries. When measured by the deals Enterprise Value to EBITDA ratios, MENA deals
depict a premium to emerging markets by around 7% and to advanced regions by around 18%.
However, when measured by deal Price to Earnings ratio, the MENA region has transacted at mere
premium of 1% to emerging countries and a discount of 8% to advanced countries.
Graph 11: Average 2009-13 Deal Valuation Multiples
MENA M&A valuations in line
with global trends
9.6x

8.9x

12.6x

13.7x
12.4x

Emerging
Advanced

8.1x

Enterprise Value to EBITDA ratio

MENA

Deal Equity Value to Net Income ratio

Source: Thomson One, Gulf Capital Research

Shareholder Activism
By Yasser Akkaoui, Chairman/Shareholder Activist,
Capital Concept sal.
Mr. Yasser Akkaoui is the founder and chairman of Capital
Concept sal. Since 2004, Mr. Akkaoui has been reinforcing
corporate governance and shareholder activism in the Middle
East. In 2013, he developed the Governance and Integrity
Rating (GIR), the first independent corporate governance rating
methodology worldwide, which was then followed by the Investors for
Governance and Integrity (IGI) declaration.

It is time for investors to increase efforts in reinforcing their rights.


It is time for shareholders to stand up for their rights. It is time for shareholders to
sound concerns about how their investments are managed. It is time for shareholders to play
a role in mitigating and identifying risk.
Shareholder activists are uniting to create a common understanding of risks and provide
a platform that allows them to exercise and reconfirm their rights in a constructive way. This will
not only protect shareholder rights, but also have a positive impact on the corporate
environment in the region.
What is the scene like today? There are 1,304 companies listed on the seventeen Arab
exchanges, from Morocco to Yemen. There is little liquidity or activity on these markets, caps
are low on exchanges, and there is hardly enough activity to even call it a market. The
shareholder base is very low and the floats of these companies are very limited. Many
companies suffer from governance failures, whereby majority shareholders deny minority
shareholders rights.
Regulators issued corporate governance codes as early as 2006-2007, and companies had until
2010 to comply with these requirements. However, adherence to these codes remains
ceremonial without genuine commitment by companies and regulators to serious
progressive corporate governance engagements.
Minority shareholders feel alienated and poorly represented on boards, whether through
weak status of voting rights or a lack of transparency and disclosure. They often do not attend
annual general meetings because they feel they will not be heard or their vote will not count.
In such an opaque environment, the entire concept of corporate governance becomes
dysfunctional due to the absence of the most important stakeholder in the equation the
investor.

32

33

Shareholders wish to be informed in advance of meetings and afforded the opportunity to add
items to the agenda. They want to know their vote counts and that their opinion contributes to the
business, financial, and other significant decisions of the board.
Since 2010, shareholder activism has been redefined. Shareholder activists are no longer labeled
corporate raiders. They are more aptly described as unsatisfied shareholders discontent with the
level of commitment of a company in protecting their interests.
The risk emanating from the lack of governance standards is a factor in deterring potential
investors, whether local or international, who are interested in emerging and frontier markets. The
major deterrents for investors in these markets are weaknesses in governance that provide neither
complete information nor guarantees for investors to exercise their rights.
The MENA region, with all of its challenges, remains a very appealing market for investing growth
capital. Its rapid and continuous development with little to no leveraging makes it an attractive
investment destination. However, the lack of transparency and weak protection of shareholder
rights is not encouraging foreign direct investment.
When in New York in February, I visited the largest funds in the United States (US) and met with
the leading Arab investors based there. The resounding consensus was that the lack of
transparency and dearth of protection of shareholder rights discounts the region from US
investment radars. This lack of satisfaction necessitates a shareholder-driven solution that
encourages shareholder communication of expectations to companies, regulators, central banks,
and capital markets authorities to reinstate confidence in investee companies.
We assessed this urgency and concluded that an optimal solution is to design a corporate
governance rating methodology that clearly responds to shareholder needs As such, we created the
Governance and Integrity Rating (GIR). GIR allows the financial community to manage
governance risk for the benefit of shareholders by providing rating scores and rubrics that are
critical for assessing governance structures.
It acknowledges the expectations, concerns, and challenges in corporate governance that are
deterring potential investors. Companies that implement corporate governance practices
beyond the Capital Markets Authorities requirements now can comply with GIR standards to
instill an additional level of investor confidence.
GIR provides shareholders with the first independent corporate governance rating methodology
regionally and internationally. GIRs concept stemmed from working alongside shareholders,
investment development funds, private equity funds, pension funds, mutual funds, family offices,
and regulators, including the Organisation for Economic Co-operation and Development (OECD),
central banks, and capital markets authorities.
The methodology employed delivers to shareholders critical information about the company they
have invested in or a target company they are assessing. The indices help analyze the companys level
of commitment to corporate governance, as well as serve as a dashboard to monitor the
companys advancement and the progressiveness.

34

The system permits shareholders to more proactively participate during general assembly
meetings and board meetings to ensure corporate governance is prioritized. It allows board
members to assume an efficient and effective role during board terms by placing corporate
governance-related concerns on assembly and board meeting agendas, which, when taken
seriously, strengthens shareholders confidence in their investments.
GIR can also be utilized by companies and financial institutions that seek to identify areas of
improvement in their corporate governance programs and who are progressive enough to
immediately respond and implement changes. These companies will be positioned at the
forefront of corporate governance compliance, positively reinforcing their reputation to existing
and future investors.
GIR is useful on a pre-deal level. Investors such as private equity funds have integrated GIR into
their due diligence for target investee companies, especially in emerging markets and frontier
markets where transparency is not the norm. Information that GIR provides on companies in
emerging markets is priceless and can identify areas of corporate governance risk to promote
transparency and accountability.
In an effort to protect shareholders rights, GIR operates on an ad-hoc level whenever a
shareholder feels that his or her rights are violated or not respected. GIR supports launching an
investigation around such violations, informing the entire investment community and alerting local
and regional regulators who are urged to immediately take action to preserve the rights of
shareholders.
In tandem with GIR, a signatory declaration was needed. Therefore, Capital Concept launched
the Investors for Governance & Integrity (IGI), which convenes like-minded investors and
corporations that recognize the importance of corporate governance in mitigating risk on a
macroeconomic level, including its microeconomic implications. These investors seek data that
identifies the most favorable geographies in which to invest and facilitates foreign direct
investment to the MENA region that fulfills global economic development outcomes.
Since the launch of GIR, awareness of its presence is growing among private equity funds. New
funds are signing the IGI declaration each month to show support for a risk-free investment.
Increasingly, funds are integrating IGI on a pre-deal or due diligence level.
Shareholder activism is burgeoning and crucial to the progression and advancement of the
MENA financial industry. It is time for local shareholders to exercise their rights to play a
proactive role in the success of the companies they invest in and the financial industry in general.
Reinforcing the implementation of best-in-class corporate governance can only be achieved in the
MENA region when shareholders assume the roles of shareholder activists to promote an
investment environment that is conducive and attractive to regional and foreign investors alike.

35

Is A Private Equity Partner


Beneficial To Your Family Business?

c) Strengthening and Incentivizing the Management Team: Private equity professionals


conduct a detailed review of the organization structure to confirm whether the current structure
is optimal for the future business plan and assess the need to bring additional talent on board.
They maintain strong networks of industry and functional experts that they can leverage (via
executive, board, or consulting capacities) to work on various performance improvement
projects.

By Khaled Baranbo, Investment & Business


Development Manager,
Abdullatif Alissa Group Holding Company
Family businesses account for three-fourths of the private-sector economy in the MENA region.
Many private equity transactions in the region involve family businesses on either side of the
transaction. However, executing private equity deals with family businesses as targets is a highly
sensitive matter. Such transactions require a clear understanding of cultural differences and local
business practices. Moreover, private equity investors should demonstrate the value addition
that they contribute to the family business, as well as establish good rapport with the business
owners and appreciate the significance of the familys achievements. In order to build strong and
healthy relationships with family businesses, private equity investors should fairly value the
company and equitably structure the deal, in addition to sharing the long-term vision of the
family shareholders.
The business model of private equity investing is to exit acquired portfolio companies at higher
values than their respective entry prices. Such increases in portfolio company valuation usually
result from both improved financial performance and higher exit multiples. Much of the efforts of
private equity investment professionals during the investment life cycle (deal origination, due
diligence, closing, value creation, and exit) should focus on these two elements.
Following are major performance levers that are used by private equity professionals to add
value to investee family businesses to improve their business and financial performance
prospects and to position the business appropriately for a lucrative exit:
a) Shared Risk: Sometimes family business owners are not willing to invest heavily to drive the
business through its next growth phase. In these circumstances, a partnership with a private
equity group can provide business owners with peace of mind knowing that they have
securitized a part of their net worth and partnered with competent investors who are looking
for ways to bring the business to its next level. As a partnership, the family business can
continue to grow and legacy owners can continue to financially participate in that growth
without the concern associated with re-investing more of their own net worth back in the
business.

36

b) Strategic Planning and Performance Management: Private equity professionals help the
target company to devise a coherent strategic plan. They design proper corporate performance
management processes that ensure control over strategy implementation and devise objective
management incentives schemes that are linked to the achievement of business objectives.

d) Institutionalization: Private equity investors help establish proper internal controls and
ensure that policy, procedures, information technology systems, and best practices are
implemented and appropriately utilized. They institute a strong corporate governance system
that encourages shared and independent decision making.
e) Capital Structure: Private equity professionals offer expert advice on the financial
restructuring of the target company, which results in increased profitability and cash flow, coupled
with a healthier balance sheet. Additionally, they help the target company build strong
relationship with the banks, thus reducing financing costs.
f) Business Development: Private equity professionals leverage their local and international
networks to support investee companies in growing organically, whether it is through the addition
of new products or services or geographic expansion.
g) Mergers & Acquisitions: Private equity professionals support investee companies in growing
inorganically by systematically screening the market for potential value adding acquisition
opportunities and executing such transactions capitalizing on their deal-making expertise.
h) Better Exit Opportunities to Family Business Shareholders: Historically, companies that
were owned by private equity investors were sold at premiums compared to other family
businesses that were not owned by private equity. Private equity professionals possess expertise
in navigating through IPO processes, which many family owned businesses lack. In many
cases, depending on the growth potential of the company and the size of their retained stake, family
business owners can make as much or more from their minority interest as they did from selling
their majority interest.
i) Succession Planning: Sometimes, next generation family members are either not inclined to take
over or not capable of leading the business through its next phase of growth. Typically, business
founders have managed all aspects of the business that can leave serious gaps when second-tier
management or second-generation family members assume leadership. Private equity can be
an important solution to these business challenges, by taking an objective view of the needs
of the business. Private equity investors can facilitate critical mediation between various branches
of the family business during transition periods and can introduce a professional management team
to ensure a smooth transfer of control. They focus on building a strong management team and
look beyond the familial and legacy issues to build the best team for the job at hand in the best
interest of the business.

37

An open dialogue with the Securities


& commodities Authority

This regulation is flexible enough to accommodate private equity and venture capital funds and
permits a simple legal framework for registering a Limited Partnership or General Partnership entity.
A clear set of regulatory guidelines is now in place to suit private placements and fundraising
activities, reducing further what previously was a substantial grey area. With the focus of the
regulation firm on client protection, the fund manager is free to select the most suitable investment
vehicle, whether it is for direct investment, co-investment, and secondary market transactions with
the typical added advantage of no capital controls, favorable taxation regime, and a stable,
dollar-pegged, financial system.
The primary contribution of the mutual fund regulation is its provision of a solid, fair, and
transparent legislative framework that clarifies rights and obligations of all stakeholders in the
collective investment landscape. At the same time, the Authority has worked proactively to ensure the
availability to investment managers of suitable instruments to gain and manage risk exposures.

By Dr. Ryan Lemand


Senior Economic ADvisor & Head of Risk Management,
Securities and Commodities Authority
In accordance with the UAE governments vision of developing the capital market and
contributing to national economic growth, the Securities and Commodities Authority (SCA, or
The Authority) sought to bridge the gap between global investment management requirements
and the opportunities offered by the rapidly expanding UAE economy.
In designing the decision 37/2012, which pertains to mutual funds, the SCA aims to make the UAE
an attractive and hospitable environment for mutual funds.
Since the first publication in August 2012, fund managers and compliance officers have
familiarized themselves with this mutual fund regulation. The Authority has processed over 400
applications and found that the majority of applicants had a clear idea of what the new regulation
consists. It is therefore the purpose of this introduction, not to delve in the details, but to present
the big picture so that market participants can benefit fully from the mutual fund regulation.
Rather than simply adding a layer of red tape, the Authority designed this regulation to provide a
landing path for mutual funds being established in the UAE and the greater MENA region.
The regulation sets the SCA as the reference point not just for licensing funds, but also for several
categories of service providers. It sets the standards to qualify for and provide services to
investment funds, thus helping identify opportunities for financial services providers, a necessary
element of the ecosystem that the Authority aims to create.
In ruling on acceptable marketing practices, the Authority has left a wide spectrum of tools freely
accessible and limited the regulatory impact on what matters most: protecting investors rights and
market integrity. The necessary focus on cross-border investments and the experience of the UAE
as an international trading hub allowed the Authority to develop the mutual fund regulation in a
way that retain attractiveness and visibility within the regional competing financial markets,
without compromising high standards.

38

Such instruments have been gradually regulated and accepted by the SCA over the past few years.
With the addition of the mutual fund regulation (decision 37), they form a veritable toolbox of
resources for investment managers.
These resources include licenses for establishing or marketing mutual funds. By providing two simple
categories for foreign and local funds and an approval for promotion material, the applicant is able to
clearly identify the starting point of the authorization process.
Another resource is the set of legal regulations for operating an investment management company,
financial consultancy, and custodians. Whether the applicant desires to participate in the UAE
investment management sector as a fund manager, in a research plus advisory capacity, or as an asset
manager solution provider, the licensing process is clear and time-bound to ensure certainty of
execution and optimal planning to launch in the UAE.
The regulatory framework is completed by advanced market-making solutions such as short selling,
lending and borrowing securities, and liquidity provisions. The availability of these three tools
translate into the following effect: local market access providers can ensure that the fund manager will
find liquidity to execute a transaction in a variety of scenarios, including borrowing the security when
it is not ready available on their book and under tighter than usual credit markets via the availability
of bank liquidity. The presence of delivery-versus-payment settlement also removes operational risks
from the equation, allowing the fund manager the peace of mind of knowing that the main causes of
slippage due to frictional costs and failed settlement have been taken care of.
In the constantly expanding and connecting global financial system, ensuring information integrity is
crucial. Most market abuse events happen due to misuse of information. Implementing the XBRL
data framework is a long-term goal the Authority has been tirelessly working toward since 2011. This
framework will bring state-of-the-art communications technology to UAE financial markets, which
will affect all facets of the securities markets, including the investment management sector. XBRL will
allow for transparent, available, and reliable financial data as a standard, and not an expensive
privilege. This will strengthen market integrity, facilitate flows, and expand the reach and the potential
client base of investment funds.
In conclusion, the mutual fund regulation is a welcome addition to a growing regulatory framework
that illuminates a path for investment managers to enter the UAE, seek and communicate with
investors in an open and safe way, access the local securities market with the support of competent
service providers, and benefit from world-class services.
39

Recently, we have noticed a growing trend of large family-owned conglomerates in the MENA
region investing directly in private equity deals. Owing to long-term experience in managing
businesses in the region, family-owned groups possess solid expertise in building and growing
companies by utilizing the aforementioned levers. In addition, family-owned businesses maintain
distinctive advantages over typical private equity players, such as the following:

a) Longer Time Horizon: Most of the private equity investments executed by family groups are
long-term in nature and not bound by a definitive exit horizon. Thus, the target company
shareholders consider the family group as an integral long-term partner of their family
business, in comparison to private equity funds that require an exit in five to seven years.

8.1 Survey of General Partners (GPs) in the MENA Region


The survey focuses on GPs in the MENA region. The survey consisted of 39 questions and was
conducted during the second quarter of 2014. The aim of the survey was to obtain a greater
understanding of the sentiments of the MENA regions PE industry from the perspective of GPs.

b) Cultural Sync: One of the primary reasons some private equity investments fail is the
cultural shock that family business shareholders experience when the new private equity
investor takes over and forces its approach. Unlike some private equity funds, family-owned
groups know the regional cultural sensitivities and are better equipped to manage change
smoothly.

Methodology:
The survey was prepared by Zawya and was conducted online with participation from
representatives of 21 private equity firms in the MENA region. Participating firms had investments
in a range of industries across a wide geographical area.

c) Prestige and Network: Many small and medium enterprises prefer to be associated with large
family groups because they are highly regarded in social circles that connect to significant
business networks.

Scope Of The Survey


The survey briefly examines the impact of the economic downturn and political instability in the
region during the period 2011 to 2013, and aims to understand GP expectations and views around
the outlook for 2014.

The performance levers utilized by the private equity investor during the investment life cycle with
the objective of achieving superior returns on invested capital are naturally in the best interest of
the investee family business and shareholders thereof, due to the inherent alignment of interest in
such equity partnership. Hence, there are many benefits of having a private equity investor as a
partner in the growth story of a family owned business.

8.2 Respondent Profile


Forty-one percent of the respondents established their private equity firms within the last five years,
with approximately one-third being in their fifth year of operation. The private equity industry in
the MENA region is relatively young by international standards. Fifty-five percent of participating
firms have less than USD 500 million worth of assets under management.

Survey

8.3 Survey Results


When was the company established?

Company Age

Participants Country Of Establishment

5 years
14%

More than 5 years


59%

Egypt
14%

Kuwait
5%

Saudi Arabia
24%

4 years
14%
3 years
13%

40

UAE
33%

Lebanon
14%
Jordan
5%

Qatar
5%

41

While the private equity industry in the MENA region is still nascent compared to more
developed markets, more than half of the participating private equity firms have been
in operation for more than five years.

What is the total value of assets under management?


Total Assets Under Management

The majority of the participating private equity firms (33 percent) are based in the UAE.
However, while these firms are based in the UAE, their investment focus is regional.

$501M - $1000M
18%

+ $1000M
18%

Who owns the fund management company?


$251M - $500M
23%

Ownership Of The Fund Management Company


Majority owned by
the management
32%

Undisclosed
9%

$101M - $250M
9%

$51M - $100M
23%

Minority owned
by management
54%

Fifty-five percent of respondents have less than USD 500 million worth of assets under
management. This is not surprising given the nature of investments in the region are often small to
mid cap, minority stake investments.

Management has
no ownership in
the management
company
14%

How many companies do you have in a typical fund?


Eighty-six percent of respondents stated that management holds ownership in the fund
management company, with over one-third (37 percent) of these being a majority share.

How Many Companies Do You Have In A Typical Fund?

How many funds have you managed since establishment?

63%

Number Of Funds Managed To Date


73%

23%

5%
1-3
14%

1-4

5-9

9%

10-14

4%
Other

Given the relatively nascent nature of the private equity industry in the region, it is not
surprising that 73 percent of respondents have managed between one and four funds to
date.

42

9%

>5

With the increase in the proportion of private equity firms having been established for more than five
years (from 50 percent in 2011 to 59 percent in 2012 and 2013), it is logical that there will be an
increase in the number of investments in a portfolio. This is a positive trend, as it shows that private
equity firms continue to invest, despite global challenges.

43

What are the main challenges in 2014 for the MENA private equity industry?

What types of entry deals are expected to take place in 2014?


Entry Deals Expected To Take Place in 2014

Main Challenged For The MENA PE Industry In 2014

17%

High valuations
13%

Corporate governance

Growth Capital
27%

Venture Capital
14%

12%

Human capital expertise

11%

Market regulations

Buyout
18%

10%

Deficiency in bank financing


Deficiency in control ideas

9%

Acceptance of PE funds partners

9%

Deficiency in intermediation

Infrastructure
5%

18%

Quality deal flow

Real estate
27%

1%

Over half (64 percent) of respondents are more concerned about portfolio level issues
(corporate governance, human capital, acceptance of private equity funds as partners, market
regulations, lack of control over deals, and lack of bank financing). About one-third of the
respondents (35 percent) believe that finding the right deal at the right price (quality of deal
flow and appropriate valuations) will be a key challenge during 2014.
What is the most important attribute for a private equity firm to win a deal?

Approximately one-third of respondents (36 percent) believe that growth capital investments will
continue to be popular in 2014. It is encouraging to note that 18 percent of respondents expect
buyout deals to be popular in 2014, which indicates that fund managers do expect some
comparatively higher value private equity deals to take place in the region.
What will be the average deal size in 2014?
In Your Opinion, What Will Be The Average Deal Size in 2014

The Most Important Attribute Required To Win A Deal Is:


50%

Network and
proprietary contacts
41%

Accessibility to
capita
9%

Sector specialisation
[percentage]
14%

18%

Management and
operational expenses
18%
Less than $10M

$10M - $20M

$24M - $40M

9%

9%

$40M - $60M

> $60M

Reputation
23%

A good network and proprietary contacts, combined with reputation (i.e. a proven track record), is
seen by a large proportion of respondents (64 percent) as the most important attributes required to
successfully complete acquisitions in the region. This is presumably linked to the challenges in
sourcing deals as highlighted by many respondents. Management and operational expertise is
considered by many others to be the most important attribute for a private equity firm to win a deal.

44

Half of the respondents believe that the average deal size will be between USD 20 million and USD 40
million. This reflects positive investor sentiment, but also continued prudence of investors.

45

In your opinion, what will be the main source for new funds to be launched in 2014?

How many funds do you expect to be launched/raised in 2014?


Funds Expected To Be Launched/Raised During 2014

Main Source For New Funds Launched In 2014


Other
9%

Other
5%

Regional high net


worth individuals
32%

None
9%

Less than 5
45%

5
18%
Regional SWFs
9%

Regional
Institutional
investors
32%

More than 5
23%

The majority of respondents remain cautious about fundraising prospects for 2014 and believe
that fewer than five funds will be successfully launched.

In line with last years survey, the majority of respondents (73 percent) expect funds to come from
within the region through high net worth individuals, institutional investors, and sovereign wealth
funds. International institutional investors are also expected to provide a prominent source of
funding (18 percent) for funds to be launched in 2014.

What will be the average size of funds raised in 2014?

What will be the type of funds raised in 2014?

In Your Opinion, What Will Be The Average Size Of Funds Raised In 2014

In Your Opinion, What Will Be The Type Of Funds Raised In 2014


Distressed (Special
Situation Funds)
3%

41%

Growth Capital
23%

32%

13%
5%

None

$100M

Secondary Investments
5%
Mezzanine
3%
Real Estate
12%
Pre-IPO
9%

Buyout
18%

9%

Venture Capital
16%

Infrastructure
11%

$101M - $250M $251M - $500M $501M - $1000M

The vast majority of respondents (73 percent) believe that the average size of funds raised in
2014 will be between USD 100 million and USD 500 million. This reflects positive investor
sentiments and investment opportunities in the MENA region, yet the reluctance to make
investments exceeding USD 500 million shows that sources will continue to exercise caution.

46

International
Institutional
investors
18%

Respondents believe that the majority of funds will be growth capital (23 percent), buyout
(18 percent) and venture capital (16 percent).

47

Do you plan to launch a new fund/new funds next year?

If you plan to launch a new fund, what would be the fund type and target market?
Fund Type

Do You Plan To Launch A New Fund/New Funds in 2014


Buyout
18%

No
14%

Not planning to
launch funds
this year
36%

Yes
86%

No specific
Market
18%

To regional HNW
32%
Growth Capital
36%

Venture Capital
14%
Infrastructure
5%

Target Market

Real Estate
9%

To international
institutions
18%

Mezzanine
9%

To regional
institutions
36%

Similar to the prior years survey, growth capital funds continue to be the preferred type of fund
for over one-third of respondents.
Interestingly, while 45 percent of respondents believed fewer than five funds to be
launched in 2013, the vast majority of respondents (86 percent or 18 fund managers) are
planning to launch a new fund in 2014. Fourteen percent of respondents state that they
have no plans to launch a fund in 2014.
In your opinion, what are the main reasons to get LPs to commit to a fund?
Reasons To Get LPs To Commit To A Fund

Fund expected
Returns
30%

Management
Fees
2%

Fund managers
sector focus
9%

Similar to last years survey, over 10 percent of private equity firms in the region perceive
international institutional investors as the target market for funds to be launched (18 percent in
2012). In 2012s survey, international institutional investors were considered by 35 percent of
private equity firms as the target market for new funds. This decline in the past two years may be
attributable to ongoing uncertainty in the European and US markets. Regional investors and high
net worth individuals are expected to contribute the vast majority of capital.
In your opinion, what will be the holding period of PE investments?
Holding Period of Investments
50%

Fund managers
investment strategy
10%

32%

18%
Transparency
15%

Fund manager
track record
34%

0%
2 years

Thirty-four percent of the respondents believe that a fund managers track record is the
key reason behind getting LPs to commit to a fund, with expected returns being the
second most popular motivation. Those funds that have been in the region for a period
of time and can demonstrate a proven track record of deal execution and exits are likely to
be in a strong position to attract capital.

48

3 years

4 years

> 4 years

The majority of respondents (82 percent) believe that funds will hold investments for at least four
years. While traditionally private equity firms have had a three to four year investment horizon,
there is an increasing willingness to hold assets for a longer period.

49

What will be the most attractive exit routes during 2014?

What are the most important benefits that PE brings to its investee companies?

Most Attractive Exit Route - 2014

What Are The Most Important Benefits


That The PE Brings To Its Investee Companies?

63%

Trade sale (to other companies)


41%

Strategic planning

23%

Initial Public Offering


22%

Financial advise and support

9%

Financial Sales (to other funds)


18%

Operational advice and support

5%

Private placements
14%

Business development
Restructuring

5%

Consistent with last years survey, PE firms see strategic planning as the most important role to
provide to portfolio companies, followed by financial and operational advice and support.

In line with last years survey, trade sales continue to be the most attractive exit strategy amongst
fund managers while financial sales and private placements are considered less attractive or
more difficult to execute.

What will be your target IRR in 2014?

How many exit deals do you expect in 2014?

Target IRRs In 2014

4%

How Many Exit Deals Do You Expect In 2014?

9%

59%

64%
23%

20-29%
15-19%
30-39%
10-14%
18%

18%

5%

Despite the challenges in the global economy, the majority (73 percent) of fund managers
still target an IRR greater than 20 percent. This is in line with responses received during the last
two years (74 percent from the 2012 survey).

50

None

Less than 5

5 to 10

More than 10

The majority of respondents (59 percent) believe that there will be fewer than five exit deals in
2014.

51

Will valuations in 2014 be lower than in 2013?

In what sectors will you be investing in 2014?


Sectors Of Interest

In 2014, Valuations Will Be Lower Than In 2013

Valuations in 2013 Were High


N/A
18%

23%

Healthcare

Agree
4%

N/A
23%

16%

FMOG/retail
14%

Education
11%

Services

10%

Energy/utility

Disagree
14%

8%

Banking/financial services
6%

Infrastructure

Agree
68%
Disagree
73%

Real estate/construction

4%

Telecommunication and allied services

4%
3%

Transport
Other

Although the majority of respondents (68 percent) believe that valuations in 2013 were high, the
majority (73 percent) also believe that valuations in 2014 will in fact be higher. This represents
more favorable exit opportunities for investment in the region.
Regions of interest

In line with 2012s survey results, private equity firms continue to be cautious and will focus on
non-cyclical and defensive sectors such as healthcare, FMCG, and education.
How is the political shakeout impacting investment decisions in countries with unrest?

Regions Of Interest
22%

GCC
Egypt

17%

Jordan

14%

Lebanon

14%

North Africa

1%

How Is The Political Shakeout Impacting Your Investment


Decisions In Countries With Unrest?

12%
9%

Turkey
Syria

6%

Europe

67%

Delaying investments

3%

US

1%

Rest of Asia

1%

South-east Asia

1%

Despite the impact of the economic challenges and recent political uncertainty, the GCC region and
Egypt continue to be the focus of private equity firms in the region. This is primarily because
of the regions large and growing population, growing middle class, increase in per capita
income, continuing demand for infrastructure, and high government spending budgets.

23%

Maintain current transactions but with better terms


Considering 2012 a proper year to benefit from
uncertainties and increase investments by
selectively targeting companies with attractive
valuations

5%

Canceling current transaction pipelines

5%

Political uncertainty in the region continues to result in the delay in executing deals and
investors being increasingly selective with investment opportunities. Twenty-three percent of
respondents highlighted the tendency of investors to maintain current transactions in
countries with unrest, but improve terms for increased protection and security.

52

53

How do you think the political uncertainty in some parts of the MENA region has affected
the investment climate?
How do you think the political uncertainly in some parts of the MENA
region has affected the investment climate?
International LPs will invest less in
region
23%

Regional PE firms will focus on East


and West Africa, Turkey and very few
countries in the MENA

18%

International investments will decrease


tremendously due to crisis

9%

International PE firms will want to


create funds specific for the region

9%

The MENA Private Equity Association is a non-profit entity committed to supporting and
developing the private equity and venture capital industries in the Middle East and North
Africa.

5%

Over one-third of respondents believe that the political uncertainty in some parts of the MENA
region will dissuade international LPs from investing in the region, or if they do invest then they
will be likely to show caution by investing smaller amounts.
Is the current political uncertainty affecting your investment decisions in terms of sector
focus?
Is The Current Political Uncertainly Affecting Your Investment
Decisions In Terms Of Sector Focus?

No
45%

9.1 About The MENA Private Equity Association

36%

Attract more international LPs to


Specific areas of the region

International PE firms will look to invest


outside the MENA region

Appendix

Yes
55%

Just over half of respondents (55 percent) indicated that the current political uncertainty in the
MENA region is having an effect on their investment decisions in terms of sector focus.

The Association aims to foster greater communication within the regions private
equity and venture capital networks and facilitates knowledge sharing in order to encourage
overall economic growth, and will actively promote the industries successes to local
stakeholders and build trust with investors, regulators, and the public regionally and
internationally.
Our mandate:
Enhance transparency through industry statistics and information sharing
Offer a platform for collective knowledge sharing from top practitioners to develop best
practice guidelines in various industries.
Leverage the expertise of leading lawyers and consultants to maintain an open dialogue
with regional regulators.
Bring together members and experts from different industries to participate in
member-only, flagship roundtable events to help members identify investment
opportunities and build new contacts.
We help the private equity and venture capital communities through the following
specific initiatives:
Issue the Annual Private Equity & Venture Capital reports.
Reach out to family offices and investors in the GCC region and raise awareness about the
members of the association and the important role they play in growing companies.
Gather GPs and industry professionals, as well as operators in education, healthcare,
retail, oil and gas, information technology, consumer goods, food and beverage, financial
services, among others, to help identify investment opportunities.
Issue white papers summarizing the roundtable discussions.
Partner with relevant associations in Europe, North America, and Asia to offer
co-memberships, discounted rates to attend global events, customized training programs,
and exposure to global research.
www.menapea.com

54

55

9.2 Members Directory


The Abraaj Group
Dubai International Financial Centre (DIFC)
Gate Village 8, 3rd Floor
PO Box 504905
Dubai, UAE
Global Offices: Istanbul, Mexico City, Mumbai, Nairobi, Singapore, London
info@abraaj.com
www.abraaj.com
Al Masah Capital
Dubai, UAE
Abu Dhabi, UAE
Kuwait
Singapore
+971 4 453 1500
nrupadityasinghdeo@almasahcapital.com
www.almasahcapital.com
Amwal AlKhaleej
Riyadh (HQ), KSA, +966 11 216 4666, Riyadh@amwalalkhaleej.com
Dubai, UAE, +971 4 327 5875, dubai@amwalalkhaleej.com
Cairo, Egypt, +202 2736 3742, cairo@amwalalkhaleej.com
www.amwalalkhaleej.com
Capital Trust Group
The Euromena Funds
Beirut, Lebanon
UK
USA
+961 1 368968
wassim@capitaltrustltd.com
www.capitaltrustltd.com
Cedar Bridge Partners
Dubai, UAE
info@cedar-bridge.com
www.cedar-bridge.com
Dubai Silicon Oasis Authority
Headquarters Building
PO Box 6009
Dubai, UAE
+971 4 501 5374
dhorska@dso.ae
www.dso.ae

56

57

EFG Hermes Private Equity


Egypt
Tel: +20 (0) 2 3535 6499
Fax: +20 (0) 2 3537 0942
Building No. B129, Phase 3, Smart Village
Km 28 Cairo Alexandria Desert Road
6 October 12577, Egypt
UAE
Tel: +971 (0) 4 363 4000
Fax: +971 (0) 4 362 1170
Level 6, The Gate, West Wing, DIFC
Dubai, UAE
pegroup@efg-hermes.com
www.efg-hermes.com
Eversheds
Global Offices: Abu Dhabi, Amman, Baghdad
Doha, Dubai, Erbil, Riyadh (in association with Dhabaan & Partners)
+962 6566 0511
nadimkayyali@eversheds.com
www.eversheds.com
Gulf Capital
Al Sila Tower, 25th Floor
Sowwah Square
Al Maryah Island
PO Box 27522
Abu Dhabi, UAE
+971 2 671 6060
info@gulfcapital.com
www.gulfcapital.com
International Finance Corporation (IFC)
2121 Pennsylvania Avenue, NW
Washington, DC, 20433, USA
+1 202 473 3800
www.ifc.org
King & Wood Mallesons SJ Berwin
31 global locations, including: China, Hong Kong, Australia, the United Kingdom,
continental Europe, the Middle East, Japan, and the United States.
dubai@me.kwm.com
www.kwm.com

Masdar Capital
Masdar City
Presidential Flight
Khalifa City A
Abu Dhabi, UAE
P.O. Box 54115
+971 2 653 3333
info@masdar.ae
www.masdar.ae
PineBridge Investments Middle East B.S.C (c)
GBCORP Tower, 13th floor
Bahrain Financial Harbour District
PO Box 58
Manama, Bahrain
+97317111888
www.pinebridge.com
Qatar First Bank
Suhaim Bin Hamad Street
PO Box 28028
Doha, Qatar
+974 4 483333
information@qfib.com.qa
www.qfib.com.qa
ReAya Holding
Suite 3007, 3rd floor
Kheriji Plaza, Madinah Road
PO Box 127232, Jeddah 21352
Jeddah, KSA
+966 2 6676777
+966 2 6656333
info@reayaholding.com
www.reayaholding.com
SEDCO
South Tower of the Red Sea Mall, Murjan District
King Abdulaziz (Malik) Road
PO Box 4384
Jeddah 21491, KSA
+966 2 215 1500
ramib@sedco.com
www.sedco.com

Malaz Capital
Suite 510, Al Akaria III, Olaya Street
Riyadh, KSA
+966 1 4601644
info@malazcapital.com
www.malazcapital.com
58

59

TVM Capital Healthcare Partners


DIFC Gate Village, Building 4
PO Box 113355
Dubai, UAE
Global Offices: Germany, USA
schuehsler@tvm-capital.com
www.tvm-capital.ae
Waha Capital
Etihad Towers, Tower 3, Level 42 & 43
PO Box 28922
Abu Dhabi, UAE
+971 2 667 7343
waha@wahacapital.ae
www.wahacapital.ae
8.3 Private Equity and Venture Capital Firms in MENA
(Excluding real estate and infrastructure funds.)
Abraaj Group
Abu Dhabi Capital Management
Abu Dhabi Investment Company
Abu Dhabi Investment House
Accelerator Management Company
Accelerator Technology Holdings
Al Ahly for Development and Investment
Al Imtiaz Investment Company
Al Mal Capital
Al Mal Mditerrane Invest
Al Masah Capital Limited
Alternative Capital Partners
Amen Invest
Amwal AlKhaleej Commercial Investment Company
Arab Business Angel Network
Arabian Gulf Capital Management LLC
Arbah Capital
Ascent Group
Athar Al Majd Holdings (Dissolved)
ATLAMED Corporate Investment
Atlas Investment Group
Attijariwafa Bank
Azur Partners
Bank Alkhair
Beltone Agriculture Management
Beltone Private Equity

60

Berytech
BMCE Capital
BMG Financial Group
BNP Paribas
Brookstone Partners Morocco
Cairo Financial Holding
Capital Invest
Capital Management House
Capital Trust
Capivest Investment Bank
Capsa Capital Partners
Carlyle Mena Investment Advisors Limited
Catalyst Investment Management Company
CDG Capital
Cedar Bridge
CERT Capital
CFG Capital
Citadel Capital
Concord International Investments
CORECAP
Corporate Finance House
Creative Edge Technology
Daman Investments
Delta Partners
Deutshe Bank
GroFin Advisory
DP World
Dubai Islamic Bank
Eastgate Capital Group
Eco-Syria Company Limited
ECP Investments
Education Capital
EFG Hermes Syria
EFG-Hermes Private Equity
Emerging Markets Partnership (Bahrain)
Entreprises Partners
Estithmaar Ventures (GP) Limited
Eversheds
EVI Capital Partners
Evolvence Capital
Fidelium Finance
FINACorp
Firogest
Fortune Management
Foursan Group
Fortis Fransabank
Future Generation Reserve

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Global Capital Management Limited


Gulf Capital
Havenvest Private Equity Middle East Limited
HBG Holdings
IdeaVelopers
Ikdam Gestion
Intel Capital
Interactive Ventures Holdings
Invest AD
Investcorp Bank
Itqan Capital
Iris Capital
IT Ventures/Nile Capital
Ithmar Capital
Jadwa Investment
Jasmine Advisers
GrowthGate Capital Corporation
KGL Investment Company
KIPCO Asset Management Company
Kuwait Finance and Investment Company
Kuwait Finance House Bahrain
Kuwait Financial Centre
Kuwait Projects Company (Holding)
Lebanon Invest Asset management SAL
Levant Investment Management Limited
Malaz Group
Marshall Fund Capital Advisors
Masdar Capital
Maxula Gestion
MENA Advisors Limited
MENA Infrastructure
MerchantBridge & Co.
Middle East Broadcasting Corporation
Middle East Venture Partners
Millennium Private Equity
Minah Partners
MITC Capital
National Bank of Abu Dhabi
Khalifa Fund for Enterprise Development
National Technology Enterprises Company
NBK Capital Limited
New Enterprise East Investments
Nile Capital
Kuwait LBO Fund GP Ltd
Paladin Capital Group Invest AD
Pharos Financial Advisors Limited
PrimeCorp (France)

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Private Equity Initiatives


Qatar Capital Partners
RAIS (Netherlands)
Rasmala Holdings Limited
Rgional Gestion
Riva y Garcia Financial Group
Riyada Enterprise Development
Sadara Ventures
Saffar Capital
SAGES Capital
Samena Capital
Saudi Company for Technological Development and Investment
Sawari Ventures
Sherpa Finance Club
SHUAA Partners Limited
Sinbad Ventures
Siparex Group
Siraj Capital Dubai Limited
Siraj Fund Management Company
Socit Tunisienne d'Investissement Capital Risque
Sphinx Private Equity Management
Swicorp
The Financial Corporation Company
The GCC Energy Fund Managers Limited
The National Investor
TIMAR Ventures General Partner Limited
Tuareg Capital
Tuninvest Finance Group
Tunisie Valeurs
TVM Capital Healthcare Partners
United Gulf Financial Services - North Africa
Upline Investments
Venture Capital Bank
Viveris Istithmar
Vodafone Egypt Telecommunications Company S.A.E.
Waha Capital
Wamda Capital
Y+ Ventures

Disclaimer: This publication is intended only to provide a summary of the subject


matter covered. It does not purport to be comprehensive or to render professional
advice. No reader should act on the basis of any matter contained in this publication
without first obtaining professional advice.

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