Global Research - MENA MENA Private Equity
• Private equity in MENA not immune to the financial crisis. • Fundraising activities almost stagnant during 2009. • Gap between funds raised and investments increased.
Massive slowdown in private equity investments and fundraising In 2009, the total number Private Equity transactions in the MENA region has decreased significantly by almost 71% to 15 entry transactions compared to 51 for the same period last year. On the fundraising front, the year saw only two funds successfully raised.
Cash not invested have reached to 52% in the MENA region The growth in fundraising activities that the region has witnessed from 2005 till 2008 resulted in US$20bn raised to date out of which approximately US$11bn is still not invested representing about 52% of dry powder in the region
Cumulative Fundraising and Investments
25,000
19,629 20,029 20,000
15,000
(US$ mn) 10,000 8,807 8,964 7,413 6,361 4,768 5,000 2,835 1,084 1,395 - 2005 2006 2007 2008 2009
Funds raised Investments
MENA Private Equity MENA Source: GVCA and Zawya Private Equity Monitor
MENA region has the highest concentration of Sovereign Wealth Funds (SWF’s) As per the SWF institute statistic, total size of SWF’s assets under management worldwide is currently standing at US$3.811trn compared to US$3.05trn a year ago. The MENA region SWF’s amounts to US$ 1.66trn representing 44% of the total SWF assets worldwide. Among the 10 largest SWF in the world there are three GCC countries which are UAE, Saudi Arabia, and Kuwait. . Faisal Hasan, CFA Positive MENA private equity sector outlook Head of Research [email protected] Despite the challenging environment that faced the MENA region in general, the MENA Phone No:(965) 22951270 region will remain one of the fast growing. This will reflect positively on the future outlook of Digvijay Tanwar, CFA the private equity sector. However, the fundraising is likely to continue to go on a slow pace Senior Financial Analyst in 2010 because private equity houses will focus more on deploying the dry powder available [email protected] Phone No:(965) 22951275 in the region. Deal flow will start to increase in 2010 supported by the opportunities available in the defensive sectors. We believe that the IPO market will improve. Nonetheless, it will not Lamya Hayat Financial Analyst be the primary exit route for private equity houses. Private equity houses will be exiting their [email protected] investments through trade sale which will expose the MENA private equity sector to more Phone No:(965) 22951203 interesting exits structure.
February 2010 MENA Private Equity 1 Global Research - MENA Global Investment House
Private Equity in Emerging Markets
Fundraising in Emerging Markets The fundraising in emerging markets has slowed down in 2009 affected by the crisis that began in the 4Q-2008 and continued through the 1Q-2009. According to a quarterly review published by Emerging Markets Private Equity Association (EMPEA), 84 private equity funds focused on emerging markets raised US$16bn in the first six months of the year which represent, a drop of 55% from 1H-2008 of (US$35.3bn raised by 132 funds).
Emerging Markets Private Equity Fundraising
$70
$60
$50 $30
$40 $34 2H
(US$ bn) $30 1H $19 $20 $35 $25 $10 $14 $16 $- 2006 2007 2008 1 H 2009 Source: EMPEA
During 2009, all emerging markets witnessed a dramatic drop in both capital commitment and number of funds closed, except the MENA region focused funds which saw a slight growth in both angles. As per EMPEA, Asia fundraising has decreased by approximately 58% and the number of funds closed has decreased by 45%. Talking about China and India separately, fundraising for China slowed in the 1H-2009, with a 77% decrease in funds raised at US$2.7bn, down from US$11.8bn in the same period in 2008. In line with the rest of Emerging Asia, fundraising in India dropped through 1H-2009 to US$2.5bn versus US$3.7bn raised during 1H-2008. Fundraising in Latin America and Central and Eastern Europe have fallen by almost 40%. African fundraising has also witnessed a decrease, though it was steady since 2007.
Fundraised by Regional Focus (US$bn) 1H2009 Growth Emerging Asia 11.1 -58% Multi region 0.2 -94% CEE/Russia 1.8 -29% Latin America/Caribbean 0.9 -30% Africa 1.0 -21% MENA 1.2 5% Total 16.2 -54% Source: EMPEA
1H-2009 has been very challenging in terms of fundraising and the number of funds closed which resulted in smaller fund size, as GPs adjusted target sizes of the funds to align with the correction of the entry valuation. In emerging markets, average fund sizes during 1H-2009 fell to US$190mn compared to US$267mn for the same period last year, representing a 41% decline.
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Fundraised by Sector 2008
2007 No of 2007 Fund Value 2008 No of 2008 Fund Value Sector Funds (US$ mn) Funds (US$ mn) Generalist 118 39,137 147 54,150 Technology 34 7,595 22 2,884 Infrastructure 8 3,395 15 5,750 Energy/Natural Resources 7 2,838 6 688 Financial Services 3 1,020 2 625 Industrial/Manufacturing 5 981 1 200 Consumer 4 624 4 456 Agriculture/Agribusiness 4 356 4 299 Environment 4 262 3 250 Telecom 0 - 2 485 Other 17 2,952 4 580 Total 204 59,160 210 66,367 Source: EMPEA
A vast majority of funds pursuing opportunities in the emerging markets continued to be generalist in their approach. Almost 70% of the funds in the market were generalist in their strategy representing 82% of the capital raised. Among the specialist funds, Infrastructure and Technology remained to be the dominant strategies representing 18% of the funds in the market.
According to EMPEA, during 1H-2009 private equity investment in the emerging markets dropped to US$12.8bn as compared to US$26.6bn in 1H-2008, representing a decrease of 52%. The US$12.8bn was invested in 265 transactions, compared to US$26.6bn and 391 transactions for the same period last year.
Funds Performance The effects of the financial crisis on private equity fund performance have become much more pronounced, a reflection of the deterioration in global markets. The drop in performance that started in 3Q-2008 has continued as a result of marking to market and subsequent write downs, although the most recent performance figures suggest a potential leveling off particularly among Asia private equity funds.
Regional Comparative Returns Index One Year Three Years Five Years Ten Years Emerging Markets VC&PE -17.6 5.5 11.4 5.4 Asia (ex Japan) PE -11.7 4.8 7.5 4.6 CEE & Russia PE -41.7 2.1 22.1 14.1 Latin America & Caribbean PE -21.8 13.3 18.3 0.3 MSCI Emerging Markets -27.8 3.3 15.1 9.0 US VC -17.1 1.3 5.7 14.3 US PE -20.6 0.9 9.9 7.7 Western Europe PE -36.9 2.1 17.9 16.8 S&P 500 -26.2 -8.2 -2.2 -2.2 Source: EMPA Asof june 2009
As per the data compiled by the Cambridge Associates LLC index, private equity return in
February 2010 MENA Private Equity 3 Global Research - MENA Global Investment House the emerging markets have inched up during the period ending June 30, with one year net IRRs of --17.6% compared to the lowest point of -31.81% in the period ending December 31, 2008 while both the Latin America and CEE/Russia indices saw improvement in returns for the period ending June 30, 2009. Asian index showed the greatest improvement in one- year returns with a net IRR of -11.67% as of June 30, 2009 versus -25.69% as of March 31, 2009. Recent improvements in performance coincided with the rebound in public markets, and in some part likely reflect the mark-to-market effects on carrying values of unrealized portfolios. Returns from EM PE and VC funds outstripped both the MSCI EM Index and the S&P Index for the one and three-year periods ending June 30. Private equity as an asset class has outperformed the S&P 500 across all time periods measured.
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MENA Private Equity
Private equity in MENA was not immune to the financial crisis in 2009. During the financial collapse in last autumn, private equity in the MENA did not get affected because they scarcely use leverage as a funding method. However in 2009, Private Equity in the MENA has witnessed a different behavior. Fundraising has become a challenge in the MENA region which has been known for its high liquidity. Deal activities have also fallen massively, despite Private Equity houses having enough cash for acquisitions. Exit options are far fewer and limited and it has been very challenging for returns to meet the expectation of the investor, thus the industry is experiencing a real shake up.
The sharp reversal of economic fortunes has driven most private equity houses to redesign their investment strategy. The bulk of PE houses, however, are focusing on a selected number of non-cyclical sectors to invest in, with the consensus being to invest in defensive sectors such as education, healthcare, fast moving consumer goods, and related industries that will survive the downturn.
Fundraising in the MENA region During 2009, the private equity activities have been almost stagnant with a limited new investment. On the fundraising front, only two funds were successfully raised. One of the funds is ADIC-UBS Infrastructure Investment Fund I which announced their first close of US$250mn out of US$600mn of its intent target size (“ITS”) in May 2009. In 2008, MENA private equity witnessed growth on the fundraising and the fund size front. According to Private Equity and Venture Capital in the Middle East (GVCA) annual report 2008,eighteen private equity funds focused on the MENA markets raised US$6.4bn, representing an increase of 10.4% compared to 2007, where in US$5.8bn were raised by 28 funds. This increase was a result of large funds raised such as US$2.6bn Abraaj Buyout Fund IV and other funds of US$500mn or more such as NBD Sana Capital, Carlyle Group MENA Fund, and Global MENA Financial Assets.
MENA Private Equity Fundraising
6,000 28 30
5,000 25
4,000 20 17 19 18 3,000 15 (US$ mn) 2,000 10
1,000 2 5
- 0 2005 2006 2007 2008 2009
Total Size of the funds No. of Fund closed each year
Source: Zawya Private Equity Monitor
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During 2009, the average fund size has decreased by 58% to reach US$200mn. The tendency to raise funds larger than US$500 will probably not continue in next three years due to the correction in the valuation of the investments and the limitations in the fundraising front.
Sector Focus In 2009, infrastructure funds are regaining its popularity due to the anticipated demand for infrastructure financing in the MENA region. Many governments in the region have set aside surpluses from oil revenue for infrastructure development but they are also increasingly turning to high net worth individuals for the capital to help meet the demand driven by fast growing and young population.
Fund raised by Sector
6,000 156 72 5,000 200 107 600 4,000 328 75 250 55 3,000 712 1,916 5,030 (US$ mn) 1,700 2,000 1,896 1,396 1,000 2,135 150 615 231 200 250 - 2005 2006 2007 2008 2009
Balanced Fund Buyout Infrastructure Energy and Power Venture capital Other
Source: GVCA and Zawya Private Equity Monitor
According to EMPEA, approximately US$400bn of infrastructure development is planned for the MENA Region over the next decade. ADIC-UBS Infrastructure Investment Fund I is targeting to invest in infrastructure projects, transport networks, power, water, health, and education facilities in the MENA region and Turkey over the next three years.
Status of Investing – MENA Private Equity Funds From 2005 to 2009, the majority of private equity funds raised in MENA region in the investing phase (approximately 58 funds with a total size value of US$13.87bn, representing 69% of the total number of private equity funds in MENA since 2005-2009). Funds that are in the fundraising stage throughout the same period in the MENA region constituted 10% of total funds. Announced funds during the period have a combined size of US$3.38bn representing 12% of the total number of funds. There were 7 rumored funds for a total size of US$3.4bn and there was one liquidation fund from 2005-2009.
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MENA Private Equity Funds by Status of Investing Since 2005-2009
Rumored, 8% Liquidation, 1%
Announced, 12%
Fundraising, 10%
Investing, 69%
Source: Zawya Private Equity Monitor
Nature and Size of Investments The region is still facing information limitation with regards to investments. As per GVCA, approximately 10% to 30% of private equity investment remains unannounced. The lack in transparency results from the immaturity of the region. We have based our analysis on the data available on Zawya private equity monitor.
MENA Private Equity Entry Transactions
4,000 70
3,500 64 60 3,000 51 48 50 2,500 44 40 2,000
(US$ mn) 30 1,500 20 1,000 15 500 10 - 0 2005 2006 2007 2008 2009
Total Size of entry transactions No. of Entry transactions
Source: Zawya Private Equity Monitor
In 2009, the total number Private Equity transactions in the MENA region has decreased massively (almost 71%) to 15 entry transactions compared to 51 in 2008. This decline seems very surprising taking into consideration the fundraising for the past 5 years. Definitely the leading private equity houses have enough cash to go after high class opportunity in the region but most of them are cautious and have taken the strategy of “wait and see”. The companies’ owners are still in denial of the new economic reality which makes them reluctant to sell their businesses at the current levels of valuation. These two factors are the reason for the decline in entry transactions in 2009.
During 2009, the total size of investments amounted to US$156.8mn through a total of 15 transactions. This is a decline compared to the same period last year which witnessed a total size of transactions amounting to US$5,181.2mn through 51 funds. The largest deal made in 2009 was Sigma Pharmaceutical Industries acquired by Eastgate MENA Direct Equity L.P. with a deal size of US$40mn, representing 26% of the total transactions size for this year.
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Average annual transaction size which was approximately US$38mn during 1999 to 2008, has significantly fallen to US$11mn in 2009.
Deployment of Fund The growth in fundraising activities that the region has witnessed from 2005 till 2008 resulted in a total of US$20bn being raised to date, out of which in between US$11bn is still not invested, representing about 52% dry powder in the region. This gap between fund raised and investment became significant in 2007 because the funds raised during that period did not have enough time to deploy their money before the crisis. Currently private equity houses in the region are under tremendous pressure to deploy the amount raised or else LPs will demand the capital back. GPs will also find it very challenging to raise more funds if this dry powder is left uninvited.
Cumulative Fundraising and Investment Made
25,000
19,629 20,029 20,000
15,000
(US$ mn) 10,000 8,807 8,964 7,413 6,361 4,768 5,000 2,835 1,084 1,395 - 2005 2006 2007 2008 2009
Funds raised Investments
Source: GVCA and Zawya Private Equity Monitor
Geographic Focus of Investments Regional funds are still mainly concentrating on the GCC markets especially Saudi as there are a lot of untapped opportunities. These funds are also trying to diversify their investments broadening their mandates to include other regions like Egypt, Turkey and South Asia.
As mentioned earlier, the largest deal made in 2009 was Sigma Pharmaceutical Industries in Egypt acquired by Eastgate MENA Direct Equity L.P. with a deal size of US$40mn, representing 26% of the total transactions size.
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MENA Private Equity Investment by Geographical Distribution Since 2005-YTD 2009*
Others, 9% Turkey, 9%
Kuwait, 11% Jordan, 15%
UAE, 20%
Saudi, 25%
Egypt, 11%
Source: Zawya Private Equity Monitor * Adjusted for Egypt
Since 2005 and till date the investment opportunities were concentrated in Egypt with approximately US$2.5bn representing 20% of the total investments. This was due to the two large transactions closed during the past 10 years being based in Egypt (Abraaj Investment of US$1.4bn in Egyptian Fertilizers Company (EFC) in 2007 and US$501mn in EFG Hermes in 2006). After excluding those two transactions, the contribution of Egypt declines to 11%, leaving Saudi with 25% and UAE with 20%.
As per GVCA annual report 2008, Egypt, Saudi Arabia, and UAE have led the MENA region private equity investment with US$467mn, US$416mn, and US$350mn respectively. The UAE and Kuwait have each experienced modest levels of investments during the same period with a combined total of approximately US$546mn being deployed into these countries. Going forward, the funds will still focus on the MENA region due to a lot of untapped opportunities in the region. These opportunities are supported by significant infrastructure development happening in the region coupled with the increase in acceptance of private equity as a source of funding by family businesses.
Sector Focus of Investments Financial services and energy were the most active investment sectors in 2008 by number of transactions, representing 20% and 14% of the total investments respectively. Infrastructure, including healthcare and education, accounted for 10% of investment activity. Healthcare in particular is expected to remain a leading sector for private equity investments over the next few years as the MENA population continues to grow rapidly. In a study, McKinsey & Co. estimates that in the GCC alone, healthcare spending in the region will increase from approximately US$12bn in 2009 to US$60bn in 2025.
Infrastructure is expected to draw the growing share of investments in 2010. Private equity houses are planning to launch new funds that target specifically the infrastructure investments in the MENA region. In November 2009, EFG-Hermes announced that it started raising funds for a US$600mn infrastructure fund. The fund is planning to start deploying its money in 1Q-2010. Its investments will focus mainly on power, wind, desalination and infrastructure in Egypt. Al Masah Capital Limited, a new player that has entered the Alternative Asset Management field, announced in November 2009 that it too has plans to launch its first social-infrastructure focused fund in April 2010.
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Exits by Value and Number Private equity investments have become quite illiquid due to the circumstances of the market. The life cycle of an average private equity fund too is likely to increase from 4 years to 7 year. The numbers of transactions have already shrunk massively due to the huge amount of dry powder in the market and the decrease in the number of entry transactions happening during 2009.
During 2009, there was only one exit which is Reliance Petroleum Limited exited by Global Opportunistic fund II. In 2008, the numbers of exit were 18 with a value of US$2.96bn, including the US$2.5bn transaction of the Egyptian Fertilizers Company sold to Orascom Construction Industries.
MENA Private Equity Exits
7,000 30
6,000 26 25 5,000 18 20 4,000 16 15
(US$ mn) 3,000 10 2,000
1,000 5 1 - 0 2006 2007 2008 2009
Total Size of Exits No. of Exits Source: Zawya Private Equity Monitor
Given the current economic downturn private equity houses are challenged to exit their investments at the multiples available in the markets. Since there are a few investments done during 2009 and most of the entry transactions were done during 2007 and beginning 2008, most of those investments are at higher valuation compared to the valuations now. Exiting private equity investments in the current climate will not enable the private equity houses to returns of 25% - 30% hurdle rates as promised to the investors.
With public markets particularly shut, IPO activity was dismal during 2009 and therefore not the dominant exit route. Most of the private equity houses are therefore looking into trade sale, which also looks challenging considering the situation of trade buyers.
MENA and GCC IPO Activity MENA and GCC IPO Trend
8,000 14,000 7,000 12,000 1,493 6,000 10,000 5,000 8,000 4,000 3,000 6,000 2,000 4,000 157 1,000 2,000 - 11,672 1,987 - 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 2008 2009 GCC Other MENA MENA GCC Other MENA
Source: Zawya IPO Monitor
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As per Zawya IPO monitor, the MENA region has witnessed a sharp decrease in IPOs in 2009. During 2009, around 17 IPO’s raised US$2.14bn as compared to 54 IPO’s raising US$13.17bn in 2008, a decline of 84% in the amount raised. Qatar played a major role through the Vodafone Qatar deal that amounted to US$952mn; representing 44.4% of the total IPO proceeds in the region. During 2009, Saudi market saw around 11 IPO’s raising US$1.035bn, representing 48.3% of the total IPO proceeds. One of the major IPOs, that dominated the IPO market in the region, was the National Petrochemicals Company in Saudi Arabia amounting to US$650mn.
Top Completed IPOs (2009) Issuer Period Country Sector Capital raised (US$mn) Vodafone Qatar Apr-09 Qatar Telecommunications 952.05 National Petrochemical Company - Jul-09 Saudi Arabia Oil and Gas 639.95 Saudi Arabia Saudi Steel Pipe Company Jun-09 Saudi Arabia Industrial Manufacturing 106.81 Al Mouwasat Medical Services Aug-09 Saudi Arabia Health Care 87.99 Etihad Atheeb Telecommunication Jan-09 Saudi Arabia Telecommunications 79.99 Company Les Ciments de Bizerte* Sep-09 Tunisia Industrial Manufacturing 77.45 Albaraka Bank Syria Oct-09 Syria Financial Services 37.23 Qatar National Bank - Syria Jul-09 Syria Financial Services 36.08 AXA Cooperative Insurance Apr-09 Saudi Arabia Financial Services 21.33 Company Gulf General Cooperative Oct-09 Saudi Arabia Financial Services 21.33 Insurance Company Weqaya Takaful Insurance and Apr-09 Saudi Arabia Financial Services 21.33 Reinsurance Company Al Alamiya for Cooperative Oct-09 Saudi Arabia Financial Services 16 Insurance Company Al Rajhi Company for Cooperative Apr-09 Saudi Arabia Financial Services 16 Insurance Buruj Cooperative Insurance Oct-09 Saudi Arabia Financial Services 13.87 Company ACE Arabia Cooperative Insurance Apr-09 Saudi Arabia Financial Services 10.67 Al Adham Foreign Exchange Jan-09 Syria Financial Services 3.62 Company Servicom May-09 Tunisia Telecommunications 2.37 Source: Zawya IPO Quarterly Bulletin
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Sovereign Wealth Funds (SWF’s)
Sovereign wealth funds have not escaped the effects of the global downturn, and some have seen their total assets fall as a result of the drop in value of their investments. However, 2009 has seen a number of new entities being formed, the collective might of sovereign wealth funds has not diminished as a result of the economic slowdown.
As per the SWF institute statistic, total size of SWF’s assets under management worldwide is currently standing at US$3.811trn compared to US$3.05trn a year ago. As mentioned earlier, this growth is mainly due to a number of new funds being established, including Sovereign Fund of Brazil. Most of the assets under management of existing wealth funds have faced a decrease in value.
Looking ahead, SWFs will continue to rise in number, particularly among the oil producing countries as well as in overall size. Based on E&Y’s SWF report, assets growth is expected to be 12-15%, and assets under management to reach US$8trn by 2015.
As per Preqin Sovereign Wealth Fund Review 2009, the level of assets under management of a sovereign wealth fund is an important factor affecting whether or not it invests in private equity. Overall, less than 17% of sovereign wealth funds with under US$10bn in total assets are known to invest in private equity funds. For sovereign wealth funds with US$10bn or more in total assets, this figure jumps to 57%. Larger funds have the resources to take a more diversified approach to managing their investment portfolios, and are therefore more likely to invest in private equity.
Sovereign Wealth Funds in the Middle East Fund Name AUM (US$bn) Abu Dhabi Investment Council (UAE-Abu Dhabi) 627.0 SAMA Foreign Holdings (Saudi Arabia) 431.0 Kuwait Investment Authority (Kuwait) 202.8 Qatar Investment Authority (Qatar) 65.0 Brunei Investment Agency (Brunei) 30.0 Investment Corporation of Dubai (UAE-Dubai) 19.6 Mubadala Development Company (UAE-Abu Dhabi) 14.7 Mumtalakat Holding Company 14.0 International petroleum investment Company (UAE-Abu Dhabi) 14.0 State General Reserve Fund (Oman) 8.2 Public Investment Fund (Saudi Arabia) 5.3 RAK Investment Authority (UAE- Ras Al Khaimah) 1.2 Source: SWF institute
According to SWF institute statistic for 2009, the Middle East has the highest concentration of SWF assets worldwide amounting to US$1.66trn representing 44% of the total SWF assets worldwide. Among the 10 largest SWF in the world there are three GCC countries which are UAE, Saudi Arabia, and Kuwait. The majority of assets are held by the Abu Dhabi Investment Authority (ADIA) amounting for US$627bn representing 39% of the total SWF
12 MENA Private Equity February 2010 Global Research - MENA Global Investment House assets in the Middle East. SAMA Foreign Holdings is ranked second, holding US$431bn which represents 26% and Kuwait Investment Authority is ranked third, holding US$202.8bn which represents 12% of the total SWF assets in the Middle East.
A considerable number of investments made by SWFs mainly go unreported or date is not available. In the absence of that, we have only analyzed the data as has been available from Zawya Private Equity Monitor for which the transaction size is available in the last five years.
During 2009, GCC sovereign wealth funds have acted as the rescuer to some of the financial institution in US and European markets. In 2008, Kuwait Investment Authority (KIA) has invested US$3bn in Citigoup and another US$2bn in Merrill Lynch & Co. In December 2009, KIA announced that it sold its stake in Citigroup with a total of US$4.1bn making a profit of US$1.1bn which represents 37% return on its investment. In 2007, Abu Dhabi Investment Authority (ADIA) has paid about $7.5bn for a 4.9% stake in Citi. This was in the form of convertible bonds that will convert into shares from 2010. ADIA has also invested in the financial sector locally, and holds a 10% stake in Union National Bank and 8.3% stake in EFG Hermes.
The Qatar Investment Authority, sold in October 2009 a GBP1.4bn stake in British bank Barclays PLC, making a profit of about GBP610mn. The Qatari authority, which continues to hold about 7% of Barclays’ shares, is the second sovereign wealth fund to exit the British bank after Abu Dhabi made about GBP1.5bn when it sold the bulk of its Barclays stake in June 2009.
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Future of Private Equity in the MENA region
Untapped Opportunities in the MENA Region
Family Businesses in the MENA Family Owned Businesses have always been the backbone of the MENA economy with almost every sector being dominated by this business model. This accounts for more than 75% of companies in the region. The private sector in the region is mostly denominated by the family enterprises concentrating on services, trade and construction sector. Some of those companies have reached the size of major conglomerate for example the Olayan, Al Futtaim, Alshaya, and Zamil groups. According to the World Wealth Report 2008, total assets of family owned enterprises in the region stood at US$ 1.7tn.
Family business has unique management challenges in a normal business environment but the global recession has added a layer of complexity to those issues, particularly in the GCC. Due to these challenges, family businesses are now opening up for private equity houses.
Private equity can find opportunity in three areas of the family business…
Generations: Many family owned businesses in the region were found in the mid 20th century, so they are now going on their second and third generation. It is a fact that most of the family businesses have a very short lifespan with an average of 24 years. Almost 95% of family businesses do not survive the third generation of ownership and only 30% survive during the second generation.
Typically, the family business owners and high net worth individuals in the MENA region have derived a large share of their wealth from inheritance. This results in businesses being split among siblings and relatives who might not be interested in the business or have other reasons to seek the help of financial institution or private equity houses to interfere in the business from different angles.
Spin offs: During the past decades the family business in the region had the mentality of diversifying their business to ensure that they will remain competitive. As per Booz and Co. survey, almost 90% of family businesses are active in three or more business segments. Given the condition of the past decades this diversification was understandable with the strong growth, limited competition and easy access to capital.
With the current markets situation those conditions are disappearing, which forces the owners of family business to consider reshaping their businesses by spinning off a part of it and concentrating other parts where they have the potential to be industry leader. There comes an opportunity for private equity houses.
Financial crisis: Family business was affected by the economic downturn. During good times family business owners’ priority was to grow their revenues and profit fast enough to keep up with the demand. They financed their growth with short term debt and managed their cash loosely. That is the reason why currently the companies are finding themselves in a short term cash trap.
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To survive the economic crisis many family businesses need to improve their working capital and their cash flows that is why they welcome private equity houses to enter their business and rescue it from drowning during the economic downturn Key Sectors to Look for 2010
Infrastructure opportunities Economies of the GCC countries are expected to resume healthy growth starting 2010 given steady and high oil (and gas) prices. GCC countries had accumulated vast surpluses over the recent years due to burgeoning oil prices enabling them to employ powerful counter-cyclical fiscal policies. Therefore, infrastructure spending is believed to underpin fast recovery in the economy for countries like Saudi Arabia, UAE (Abu Dhabi in particular) and Qatar which have both the ability to spend and the willingness to do so as well.
The Middle East is second only to Asia for projected infrastructure spending over the next three years, estimated at US$400bn annually according to EMPEA. Overall projects market in Saudi Arabia stands at US$615.3bn as of December 2009 of which merely 8.5% are on hold while for Qatar the projects market is estimated at US$230.2bn with 3.4% on hold. The Projects market of Oman is also progressing quite well and overall governmental and private projects are estimated at US$104bn with US$6.5bn i.e. 6.2% are on hold. With pick up in the economy, we estimate the projects on hold number to drop.
Private equity investors are not only pursuing these newly available project development and finance opportunities, but also injecting a growing pool of capital into infrastructure-related sectors—particularly trade (e.g., ports and logistics) and utilities (e.g. water treatment, power generation and distribution). Currently, there are several funds in the MENA region that focus on infrastructure opportunities. One of the largest infrastructure funds raised for the region to date, Abraaj Capital’s US$2bn Growth & Infrastructure Fund has already completed a number of investments. Dubai-based Millennium Private Equity closed two of five sector focused funds in 2008, an Energy Fund and a Telecom Fund at US$200mn and US$150mn, respectively. In September 2008, EFG-Hermes Private Equity invested in Gulf Housing Solutions (GHS), corporate housing facilities Construction Company based in the UAE. In November 2008, Amwal Al Khaleej exited Dubai Contracting Company through a strategic sale of its 49% equity stake.
Logistics: Across the region, infrastructure – specifically utilities and transportation – is being developed. Very large aviation & logistics related infrastructure development is on the anvil. Large amounts of government spending on ports, free zone airports and logistics parks have been announced. The creation of world-class infrastructure such as the Dubai World Central, Dubai Logistics Corridor (which will provide an integrated to between DWC - Al Maktoum International Airport, Al Maktoum International Airport, Jebel Ali Port and free zones, with an integrated sea, air and land transport infrastructure) are expected to ensure continued expansion of players in the region & space. In addition to infrastructure opportunities, government efforts to diversify away from oil present attractive opportunities for investors.
With growth in trade and infrastructure investments in logistics related activities, logistics services are catching the interest of private equity players indicating an upside potential for
February 2010 MENA Private Equity 15 Global Research - MENA Global Investment House the sector. Historically, transportation has attracted interest in the Middle East. However, the close linkage to economic performance, trade and GDP growth, created caution in the past year.
According to Gulf Venture Capital Association (GVCA), the transportation sector in Mena attracted US$1.2bn (15% of the total private equity investments made in 2008 in MENA) of private equity investments from 2000- 2008. Out of this, the air transport sector had been dominant with 55% of the total investment, followed by the logistics sector which saw 20%. The port sector attracted 4% of the total private equity investments in the given period.
With the outlook for GDP growth as well as the share in world trade being relatively positive compared to other regions, the sector is expected to see a renewed interest. This is already slowly becoming visible with, Abu Dhabi government-owned financial services company Invest AD announcing an intent to invest US$75mn to take a significant minority stake in Ekol Lojistik A.Ş. (EKOL), one of Turkey’s integrated logistics companies. The company provides innovative and customized solutions in the space and is expected to benefit significantly from growth in Europe and the Middle East.
Utilities: GCC current installed power capacity is 75,000MW which is expected to grow by 44% to surpass 1,609 megawatt hours by 2013. An annual growth of 9.5% in demand shall require additional 55,000MW of incremental power by 2015 and this magnitude of the additional capacity shall need funding of about US$50bn (SR187.5bn).
Saudi Arabia, in particular, has emerged as the fastest growing consumer of energy in the GCC and rest of the Middle East. In Saudi Arabia, the demand has grown by up to 8% and is likely to double over a period of next 10 years with an additional capacity of 35,000MW. In Qatar where the economic growth is outpacing almost all the regions in GCC, has witnessed a rise of 14% in demand for electricity.
The power generation capacity is also expected to double in UAE to 40,000MW by 2020 due to fast economic growth and increasing activities in industrial and other sectors. Abu Dhabi has announced that 7% of the energy requirement will be met through renewable energy by 2020. The growth in electricity demand in Dubai has halved to 6% in FY09, while in Abu Dhabi demand for electricity grew by 11% in FY09 as compared to growth of 8% in FY08.
Saudi Arabia is the key driver of GCC electricity demand, due to higher population and internal demand increasing due to growing economy. It is evident that big ticket power projects are coming up in Saudi Arabia and there will be more projects implemented as demand outpaces the supply.
Healthcare: Healthcare will remain the focus of private equity in 2010 as it was through the previous years. The attractiveness in the healthcare sector will remain as it is driven by the rising and aging populations, higher prevalence of affluent lifestyle diseases and increasing per capita healthcare spending across the region. Due to those factors MENA region, specially the GCC, is likely to experience a sharp increase in healthcare needs in the coming years. That is the reason the governments in the region are planning ahead for several project in
16 MENA Private Equity February 2010 Global Research - MENA Global Investment House the healthcare sector. Currently MENA Healthcare is characterized by low private sector penetration which currently stands at 25% of total expenditure. This is expected to increase with increased private sector participation. Introduction of mandatory medical insurance for expatriates and private sector employees in Saudi Arabia and UAE with other countries also expected to follow, just adds to the growing potential in the sector.
Despite some delays in the planned projects, the region has a pipeline of healthcare projects to meet the growth in demand. More than 200 hospital projects have been announced or are under construction with a cumulative capacity of up to 27,009 beds most of which are due to be delivered in 2015.
Health Care Expenditure (2000-2007)
30 80%
25 75% 20
15 70%
10 65% 5
0 60% 2000 2001 2002 2003 2004 2005 2006 2007
Private sector expenditure Govt. expenditure
Govt. expenditure as % of total expenditure
Source: WHO
Alpen Capital estimates the size of the GCC healthcare services sector to about US$18bn in value terms. And it is expected the industry to reach a market size of around US$47-55bn by 2020, equivalent to a 9% CAGR.
Private equity houses are already investing in the healthcare sector in the region. In December 2009, Carlyle Group announced that it has acquired 40% of a Medical Pack Saglik Hizmetleri A.S., which is the second largest healthcare company in Turkey. And among the investment made in 2008, Dubai’s Abraaj Capital, one of the largest private equity houses in the region, bought stakes in Saudi Tadawi Healthcare Company (Tadawi), the kingdom’s largest pharmacy chain, with a network of 470 shops, and Al-Borg Laboratory, an Egyptian medical testing company. Another Dubai-based firm, Ithmar Capital, has invested in Belhoul Lifecare, which runs private hospitals and clinics around the region, and Pharma World Holdings, which distributes and markets medicines in the UAE.
PE firms remain buoyant regarding their investment plans in the GCC healthcare sector. According to a recent survey conducted by GVCA, 44% of the surveyed PE firms have plans to invest in the GCC healthcare sector over the next few months.
Education: Education in the GCC is a relatively new sector but it has become a key spending priority in most countries. Higher education especially in developing the technical skills will help in
February 2010 MENA Private Equity 17 Global Research - MENA Global Investment House the development of small and medium enterprises. To date, education has been very heavily reliant on the public funding, but private sector participation is now on the rise along with significant new infusions of government funds. All the governments in the regions have made financial allocation to support the growth in the education sector. For instance, Saudi Arabia has increased its budget of education spending in 2009, it reached to SR122.1bn from SR17bn in 2008, representing a remarkable 26% of total government expenditure and constituted the largest single category. The government made provisions for the construction of 1,500 new schools in addition to another 3,240 schools which are currently being built. In addition, some 2,000 schools are to be renovated.
Share of Education Expenditure out of Total Govt. Expenditure
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00% Kuwait Oman Bahrain Saudi Arabia UAE Qatar
Source: UNESCO Institute of Statistics
Privatization of education and an increased presence of global education institutions across education levels – school, graduate universities are setting up base in the region in addition to several other institutions from Asia. One example is the Qatar Education City, which houses campuses of six US universities. A number of foreign universities as well as global brands like London School of Economics, INSEAD etc have set up campuses elsewhere in the region. The new US$12.5bn King Abdullah University of Science and Technology in Saudi Arabia will mark a significant break from past traditions in the Kingdom.
Private equity houses are eyeing a lot of investments in the education sector. During 2009, NBK capital invested US$7mn though it’s GCC Mezzanine Fund in Al Maaref Private School in UAE. Another investment was closed by Global Capital Management through their Private Equity Fund investing US$11mn in Madaares PJSC in Kuwait.
Current GCC general education market size is estimated at over US$3.0bn including Saudi market size of US$1.5bn. Young population and rising standard of living is driving the need for quality education and with low private sector participation, the sector offers an attractive preposition. With the private sector participation in Saudi on the up rise and growing at 6.5% as against 3% in government sector, the market offers attractive opportunity.
18 MENA Private Equity February 2010 Global Research - MENA Global Investment House
MENA Private Equity Outlook in 2010
2009 presented the global economy with one of the most challenging environments ever witnessed. As with most other segments, Private Equity too was severely impacted. There was a dramatic drop in deal flow volume and a significant downward adjustment in valuations for portfolio companies. As a consequence, fund-raising almost stagnated.
Middle East economies hit at a fundamental level… The Middle Eastern Economies are largely driven by oil. As a result of a global economic meltdown, oil prices plummeted and became the primary driver of a downward pressure on the economic performance of the region. Oil prices witnessed a sharp decline - from a peak of US$147 per barrel in the summer of 2008 to about US$30 per barrel at the beginning of 2009. This together with subsequent cuts in oil production significantly impacted all economic activity in the region.
… Resulting in a liquidity and credit-crunch driven investment environment … With panic across world economies adding to the impact of this decline in oil prices, the region witnessed a sudden drying up of capital inflows. This relative absence of foreign funds and the decline in domestic asset prices together put severe strains on the balance sheets of banks that had both borrowed externally as well as were heavily exposed to real estate and equity markets. A weakening of asset quality also impacted private sector credit growth, leading to rising borrowing costs. Loan-loss provisions at the same time depleted capital and restricting banks’ ability to extend new loans. This led to a striking slowdown of credit expansion.
The reversal of fortunes in the previously buoyant debt markets and the changing relationship between private equity and banks has been the primary driver of the challenges being experienced by the industry. As liquidity dried up, the excess funds which were previously directed into private equity investments were forced to use the funds for internal business requirements. Consequently, fund raising was deeply impacted.
… And impacting exit opportunities for investments made The difficult market environment and subdued investor sentiment led to a reduction in the number of exits for private equity firms. This directly affected the profitability of existing holdings, and was a major contributor to the slow-down in the new fundraising market. The IPO activity remained quiet throughout the year due to difficult market conditions. There were a total of 17 IPOs during the year in the region of which 11 were in Saudi Arabia alone as opposed to 54 IPOs last year. With firms not being able to exit their portfolio companies at an acceptable level, many are now holding companies for longer periods than initially planned, leading to a significant drop in distributed capital for investors from exited investments in 2008 and 2009.
Early regional recovery is underway The external environment is gradually improving: oil prices are rising, external financing conditions are easing, and an early global recovery is under way. Despite the challenging environment that faced the MENA region it will remain one of the fastest growing economies.
February 2010 MENA Private Equity 19 Global Research - MENA Global Investment House
Middle East v/s World GDP Growth
Egypt 2009* 2010* UAE Saudi Arabia Qatar Oman Kuwait Bahrain Middle East EM US World
(5.0) - 5.0 10.0 15.0 20.0
Source: IMF
A new environment has emerged – diligence, vigilance & prudence to drive transactions… Every crisis presents an opportunity and this crisis too has paved the way for better practices. Until now, most private equity firms invested little time evaluating their target company. The deals were mainly focused on financial engineering; there was very little due diligence. As times have changed, private equity firms are forced to reassess their strategies.
Many distress assets are coming for sale making it imperative to do proper valuation of these distressed assets. Proper valuation can only be possible with proper due diligence. Nonetheless, this is a great time to buy because prices are fair and the regional economy has a bright future.
Infrastructure (transportation & utilities), healthcare & education to be PE targets… Across the region, infrastructure – specifically utilities and transportation – is being developed. Very large aviation & logistics related infrastructure development is on the anvil. Large amounts of government spending on ports, free zone airports and logistics parks have been announced. The creation of world-class infrastructure such as the Dubai World Central, Dubai Logistics Corridor (which will provide an integrated to between DWC - Al Maktoum International Airport, Al Maktoum International Airport, Jebel Ali Port and free zones, with an integrated sea, air and land transport infrastructure) are expected to ensure continued expansion of players in the region & space. In addition to infrastructure opportunities, government efforts to diversify away from oil present attractive opportunities for investors.
With a rise in the population and better infrastructure, investments are being made to expand basic amenities like healthcare and education. Most of the region is witnessing a rise in the number of private healthcare and healthcare service providers- which is a signal for the growth potential available in the sector. Privatization of education and an increased presence of global education institutions across education levels – school, graduate universities as well as global brands like London School of Economics, and INSEAD etc are setting up base in the region in addition to several other institutions from Asia. Evidently, these sectors with their relative insulation from market volatility are on a growth trajectory.
… With funds coming from sovereign wealth funds (among others) Sovereign Wealth Funds (SWFs), despite having experienced heavy losses due to exposure to developed markets, are expected to become an even greater source of capital within the
20 MENA Private Equity February 2010 Global Research - MENA Global Investment House
MENA private equity industry. According to a survey conducted by data provider Preqin, Sovereign Wealth Funds are anticipated to account for approximately half of all private equity funding originating within the region over the next five years as they look to invest a greater percentage of their wealth in local markets.
What goes down will go up – Good time to buy 2009 was a year of wait-and-watch wherein private equity funds and promoter groups were both in a state of flux regarding valuation expectations. While promoter expectations were reduced, PE funds went through a combination of either confusion regarding an equilibrium valuation or became hungry for cheaper assets and hence were unwilling to accept valuation expectations presented to them. Investments in the time of crises are historically known to give the highest amount of returns. Now, with an apparent recovery, the a realism seems to have entered the market and a realization that assets now purchased, are likely to result in significant upsides going forward.
February 2010 MENA Private Equity 21 Global Research - MENA Global Investment House Size ($) - 8.50M - - - 7.00M 26.50M 15.00M 1.00M - - 30.00M - 40.00M 7.00M - - - - Industries Telecommunications Infrastructure Development Poultry Farming Health Care Services Landlords and Developers Makers Telecommunications Infrastructure Development Fossil Fuel Power Generation Fishing and Fish Farming Telecommunications Infrastructure Development Refining Makers Electric Power Generation Makers Pharmaceuticals Childcare, Elementary, and Secondary Schools - Advertising - Software and Application Developers Sector Telecommunications Agriculture Health Care Real Estate Industrial Manufacturing Telecommunications Power and Utilities Agriculture Telecommunications Oil and Gas Consumer Goods Power and Utilities Consumer Goods Health Care Education Real Estate Media Information Technology Information Technology Country United States Egypt Turkey UAE Kuwait UAE Oman Turkey France India Saudi Arabia United States Saudi Arabia Egypt UAE UAE UAE UAE UAE Fund Name Delta Partners MENA Telecom Fund EuroMena Fund The Carlyle Group MENA Fund Abraaj Real Estate Fund Gulf Opportunity Fund I Delta Partners MENA Telecom Fund MENA Infrastructure Fund NBK Capital- GSC Mezzanine Fund I The Building Block Equity Fund Global Opportunistic Fund II Eastgate MENA Direct Equity L.P. MENA Transformation Fund I Gulf Opportunity Fund I Eastgate MENA Direct Equity L.P. NBK Capital- GSC Mezzanine Fund I Saffar Financial Infrastructure Fund Intel Capital Middle East and Turkey Fund Intel Capital Middle East and Turkey Fund Intel Capital Middle East and Turkey Fund Target Company Aricent Wadi Holdings Medical Park Signature Clubs International Ltd Gulf Cryo Vox Spectrum Limited United Power Company Kiliç Deniz Luceor Reliance Petroleum Limited L›Azurde Company for Jewelery APR Energy LLC L›Azurde Company for Jewelery Sigma Pharmaceutical Industries Al Maaref Private School John Charcol Middle East Conservus International FZ- LLC Pulse Technologies FZ-LLC Vertex Animation Studio FZ- LLC Buy/ Sell Buy Buy Buy Sell Buy Buy Buy Buy Buy Sell Buy Buy Buy Buy Buy Buy Buy Buy Buy MENA Private Equity Transactions (2008-2010) Date 2010 2010 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009 2009
22 MENA Private Equity February 2010 Global Research - MENA Global Investment House Size ($) 7.30M 23.00M - 17.50M ------92.25M 11.43M 38.97M 0.11M 0.15M 180.00M 6.00M - 0.20M Transportation Transportation Truck Truck Industries Oil and Gas Field Services Oil Production Services Other Support Services- Education Makers Construction Chemicals Airports Support Services Medical and Diagnostic Laboratories Conventional Integrated Oil Companies Conventional Water Utilities - Long Distance General Conventional - Long Distance General Commercial Lending Business Consulting Telecommunications Infrastructure Development Insurance Brokers General - Sector Oil and Gas Oil and Gas Education Industrial Manufacturing Construction Transport Health Care Financial Services Oil and Gas Financial Services Power and Utilities Transport Education Transport Financial Services Services Telecommunications Financial Services Construction Information Technology Country Bahrain Kuwait Saudi Arabia Turkey Lebanon Turkey Egypt Jordan Pakistan Egypt Singapore Kuwait Kuwait Kuwait UAE Lebanon Egypt Lebanon UAE Lebanon Fund Name Unicorn Global Private Equity Fund I Millennium Private Equity Global Energy Fund Eastgate MENA Direct Equity L.P. Intaj Capital EuroMena Fund IDB Infrastructure Fund L.P. Egyptian Direct Investment Fund Limited The Jordan Fund Infrastructure and Growth Capital Fund Egyptian Direct Investment Fund Limited Istithmar World Capital Global Buyout Fund L.P. Private Equity Fund Global Opportunistic Fund II ABAN Seed Capital Fund LP ABAN Seed Capital Fund LP ADIC MENA Partners, LP EuroMena Fund Amwal Fund II ABAN Seed Capital Fund LP Target Company Bahrain Maintenance and Diving Services Kuwait Energy Company Al Raeda for Education Development STEP Sodamco Holding TAV Airport Holding Company Al Borg Laboratory Arab Orient Insurance Company - Jordan Bosicor Group Contact Car Trading Company Hyflux Jassim Transport and Stevedoring Company Madaares PJSC Jassim Transport and Stevedoring Company Hayati Healthcare I-Level Mobiserve Holding Chedid Capital Holding Dubai Contracting Company PinPay Buy/ Sell Buy Buy Buy Buy Sell Sell Sell Sell Buy Sell Sell Buy Buy Buy Buy Buy Buy Buy Sell Buy MENA Private Equity Transactions (2008-2010) Date 2009 2009 2009 2009 2009 2009 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008
February 2010 MENA Private Equity 23 Global Research - MENA Global Investment House Size ($) - - - 98.00M - - - - 6.00M 28.57M 32.71M 7.00M 13.14M 43.95M - 41.51M 84.00M - - Industries Software and Application Developers Other Power Generation Remediation and Waste Management Services Distributors Beverage Distributors General Financial Services Telecommunications Infrastructure Development Wireless Communications Services Canned Fruits and Vegetables Islamic Conventional Warehousing and Storage Services Commercial Banking Conventional - Credit and Finance Shopping Malls Makers Makers Sector Information Technology Power and Utilities Services Information Technology Food and Beverages Financial Services Telecommunications Telecommunications Food and Beverages Financial Services Financial Services Transport Financial Services Financial Services Construction Financial Services Real Estate Consumer Goods Industrial Manufacturing Country UAE United Kingdom Lebanon Region-wide UAE Saudi Arabia United States UAE Iraq Kuwait Kuwait Jordan Malaysia Bahrain UAE Jordan Egypt UAE UAE Fund Name Intel Capital Middle East and Turkey Fund Masdar Clean Technology Fund Growth Gate Gulf Opportunity Fund I ADIC MENA Partners, LP NBK Capital Equity Partners Millennium Private Equity Telecoms, Media & Technology Fund Millennium Private Equity Telecoms, Media & Technology Fund The Marshall Fund Global MENA Financial Assets Global MENA Financial Assets Unicorn Global Private Equity Fund I Global MENA Financial Assets Global MENA Financial Assets MENA Transformation Fund I Global MENA Financial Assets Al-Futtaim MENA Real Estate Development Fund Amwal Fund I Abraaj Buyout Fund II Leasing and Financing Soor Target Company Sphere Networks London Array Averda International Redington Gulf Unitra METS Group Nayifat Installment Company Turin Networks Inc FRiENDi mobile Harir Tomato Paste and Fruit Processing Plant Al Manar Financing and Leasing Al Company Al Tajamouat Warehousing & Logistics PSC Asian Finance Bank BMI Bank BRM Construction LLC Bindar Cairo Festival City Damas International GMMOS Group Buy/ Sell Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Sell Sell MENA Private Equity Transactions (2008-2010) Date 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008
24 MENA Private Equity February 2010 Global Research - MENA Global Investment House Size ($) 14.55M 65.00M 20.04M 75.10M - 44.90M 10.15M 2.95M 14.77M - 12.00M 10.91M 188.00M 15.00M - 30.00M 313.00M 92.30M 30.00M 2500.00M - Industries Islamic - Conventional Offshore Contractors Boats and Ships Cement Islamic Makers Specialty Contractors Oil and Gas Field Services Oil Shipping Services Islamic Charter Airlines Marketing and Distribution Landlords and Developers - Charter Airlines Department Stores Department Stores Makers General Distributors Sector Financial Services Real Estate Financial Services Construction Transport Construction Financial Services Industrial Manufacturing Construction Oil and Gas Transport Financial Services Transport Oil and Gas Real Estate Real Estate Transport Retail Retail Industrial Manufacturing Industrial Manufacturing Country Kuwait UAE Kuwait Egypt Turkey UAE Kuwait UAE UAE Libya UAE Bahrain Jordan Algeria Russian Federation China Saudi Arabia Saudi Arabia Saudi Arabia Egypt Saudi Arabia Fund Name Global MENA Financial Assets Horus Private Equity Fund III Global MENA Financial Assets Horus Private Equity Fund III The Carlyle Group MENA Fund Unicorn Global Private Equity Fund I Private Equity Fund Global Opportunistic Fund I Global Opportunistic Fund I The Libya Fund Global Opportunistic Fund I Global Opportunistic Fund I Intaj Capital Intaj Capital Saraya Real Estate Mena Fund Global Opportunistic Fund II Abraaj Buyout Fund II Global Buyout Fund L.P. Global Opportunistic Fund II Infrastructure and Growth Capital Fund Growth Gate Target Company Gulf Company for Takaful Insurance Gulf Housing Solutions Limited Industrial Bank of Kuwait Maridive and Oil Services TVK Shipyard Orimix Concrete Products LLC Al Farabi Investment Company Alumco- UAE Depa Etelaf Oil Services Gulf Navigation Holding Ithmaar Bank Jordan Aviation Company Petroser Saraya Sochi Evergrande Real Estate Group National Air Services Al Sawani Food and Industrial Supply Co. Al Sawani Food and Industrial Supply Co. Egyptian Fertilizers Company Roots Group Arabia Company Buy/ Sell Buy Buy Buy Buy Buy Sell Sell Sell Sell Buy Sell Sell Buy Buy Buy Buy Sell Buy Buy Sell Buy MENA Private Equity Transactions (2008-2010) Date 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008
February 2010 MENA Private Equity 25 Global Research - MENA Global Investment House Size ($) - - - - 30.00M - 3000.00M - - - 15.00M 17.00M - - 4.50M 53.00M - - 136.11M 877.50M 30.00M Industries Automotive Rental Services Support Services - Maritime Specialty Contractors Spas and Other Leisure Activities Management Airlines Support Services - Commercial Banking Conventional Paper and Products Fine Arts - Landlords and Developers Spas and Other Leisure Activities Management Jewelry and Watch Retailers Oil and Gas Field Services Edible Oils Architechtural Services Electro-Mechanical Contractors General Exploration and Production Health Care Services Sector Transport Transport Construction Leisure and Tourism Transport - Financial Services Financial Services Industrial Manufacturing Education Leisure and Tourism Real Estate Leisure and Tourism Retail Oil and Gas Food and Beverages Construction Construction Construction Oil and Gas Health Care Country Saudi Arabia Egypt UAE United Kingdom Philippines United States United States Lebanon Egypt India Egypt Oman Singapore UAE Bahrain Turkey UAE UAE UAE Singapore UAE Fund Name NBK Capital Equity Partners MENA Infrastructure Fund TNI Growth Capital Fund Istithmar World Capital The Port Fund L.P. Istithmar World Capital Kuwait Investment Authority EuroMena Fund EuroMena Fund Abraaj Buyout Fund II Horus Private Equity Fund III Saraya Real Estate Mena Fund Dubai International Capital SHUAA Partners Fund I, L.P. Unicorn Global Private Equity Fund I NBK Capital Equity Partners Ithmar Fund II SHUAA Partners Fund I, L.P. TNI Growth Capital Fund Mubadala Development Company Global Opportunistic Fund II Target Company Al Tala›a International Transportation Co. Alexandria International Container Terminals Depa ESPA International Global Gateway Logistics City Gulf Stream Asset Management LLC Citi Group IBL Bank National Printing Company Osian›s Connoisseurs of Art Private Limited Sahara North Bahariya Saraya Bandar Jissah The True Group Damas Jewellery Gulf Strategic Partners WLL Yudum Food Dewan Architects and Engineers Drake and Scull International Dubai Contracting Company Pearl Energy Ltd Gulf Healthcare International Buy/ Sell Buy Buy Sell Buy Buy Buy Buy Buy Buy Buy Buy Buy Buy Sell Buy Sell Buy Buy Buy Buy Buy MENA Private Equity Transactions (2008-2010) Date 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008 2008
26 MENA Private Equity February 2010 Global Investment House Website: www.globalinv.net Global Tower Sharq, Al-Shuhada Str. Tel. + (965) 2 295 1000 Fax. + (965) 2 295 1005 P.O. Box: 28807 Safat, 13149 Kuwait
Brokerage Research Index Khaled Abd Elrahman Khaled Faisal Hasan, CFA Rasha Al-Huneidi (965) 2295-1700 (965) 2295-1270 (965) 2295-1285 [email protected] [email protected] [email protected]
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