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 region’s 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 region’s 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,
3
e 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 Whitt eld, 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, omson Reuters Josiane Assaad, Content Manager, Zawya Investment Monitors, omson Reuters Youmna Akiki, Research Associate, Zawya Investment Monitors, omson 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, omson 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, e 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 5 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 1940’s with a primary focus in textiles and foodstu trading, over the past six decades the Alissa Group has evolved into a diversi ed conglomerate. Today, the Alissa Group is considered a pioneer of automotive sales, service, nancing, and leasing in the Kingdom. e group has diversi ed 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 nance, 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 diversi cation and leveraging existing assets. We believe our next generation of growth will derive from new opportunities and diversi cation.
rough 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.
6 7 Sponsor Profile
Growthgate Capital Corporation is a growth investment rm 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 rm that was formed in 2007, and has representative o ces in Beirut and in Dubai. GrowthGate Capital has circa $1.7 billion of assets-under-monitoring and a shareholder equity of $450 million.
e founding shareholders of Growthgate Capital include State-owned banks, public pension funds, investment companies, single-family o ces and a group of prominent corporate leaders from the Middle East region.
www.growthgate.com
Vision. Integrity. Focus.
8 9 Sponsor Profile Sponsor Profile
Investing in Value Creation in Healthcare Zawya, a omson Reuters business, is the preeminent source of Middle East and North Africa business intelligence. Our membership solutions provide unique TVM Capital Healthcare Partners Ltd. was established in 2009 as a content and tools including detailed pro les on public and DFSA-licensed fund manager operating out of the Dubai private sector companies in the region, unparalleled International Financial Centre (DIFC), and was the region’s rst reporting on MENA markets, asset classes, and details of private equity rm dedicated exclusively to the healthcare sector. regional projects to provide in-depth analysis for investors We have established ourselves as a developer of healthcare and business professionals in order to make more business concepts, as well as an investor and leader in building informed investment decisions and build pro table growth businesses in private healthcare in the MENA region and relationships. India. We focus on companies in the eld of healthcare services, pharmaceuticals, devices, and other hospital-related businesses. Its free news site, Zawya.com, attracts C-level professionals TVM Capital Healthcare Partners’ strength is the breadth and from the business and nance world providing breaking depth of our international relationships, our commitment to news powered by Reuters as well as content from major quality, transparency, and innovation in the way we do business. regional providers. Zawya.com Arabic o ers a broader Our strong local presence, excellent investors, and a strategic selection of news genre for the Arabic speaking global partner network provide a powerful support system for community, reaching graduates up to senior level the entrepreneurs and management teams we back. managers from across the MENA region. Empowering entrepreneurs and SME community within the We create, invest in, and grow pioneering companies, supported by UAE, BusinessPulse.ae, o ers the environment to partnerships with strong international healthcare institutions support success through its news, featured articles and such as the Spaulding Rehabilitation Network (a Harvard business tools designed speci cally to guide businesses Medical School teaching hospital), Joslin Diabetes Center (an through each stage of development as well as inspire independent, non-pro t institution a liated with Harvard Medical professionals with success stories from across the region. School), and Bourn Hall Clinic, Cambridge, UK (the world’s rst in-vitro fertilization clinic). rough its services, Zawya empowers nearly 1 million professionals with the insight and transparency TVM Capital Healthcare Partners is part of TVM Capital Group, they need to conduct business e ectively by an a liation of globally acting venture capital and private equity empowering them to build pro table rms with an operating track record of 30 years. TVM Capital relationships.KPMG is a global network of professional Group has nanced more than 120 healthcare and life science rms with over 155,000 sta in member rms across 155 companies and has documented its success as a growth capital investor through 43 initial public o erings from its portfolio. countries.
For more information please visit: www.tvm-capital.ae KPMG in the UAE was established in 1974 and has grown or to 750 professional sta led by more than 25 partners, www.tvm-capital.com across 8 o ces in the country. We work closely with our colleagues in o ces throughout the MENA region and across the world.
10 11 Table of Contents Important Notice Important Notice 1.1 Basis Of Preparation 1 1.2 Definitions And Assumptions 1.3 Data Filtering 1.1 Basis Of Preparation
KPMG Introductory Message is report has been prepared based on data provided by the MENA Private Equity Association and sourced from the Zawya Private Equity Monitor. Private Equity In The MENA Region 3.1 Summary Historical data was updated from that used in the 2012 annual report to re ect 3.2 Funds increased disclosure of information in the market. KPMG member rms have not 3.2.1 Funds Raised To Date initiated any primary research in relation to this dra report and have not sought to establish 3.3 Investments or con rm the reliability of the data provided by the MENA Private Equity Association and 3.3.1 Information Limitations Zawya. 3.3.2 Investments Made To Date 3.4 Regional Focus e information contained herein is of a general nature and is not intended to address 3.5 Sector Focus the circumstances of any particular individual or entity. Although we endeavor to provide 3.6 Exits 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 The MENA Merger And Acquisition Market Over professional advice a er a thorough examination of the particular situation. The Past Decade Anthony Hobeika, Head of Research In analyzing and determining the parameters of available data, it has been necessary to and Strategy, Gulf Capital apply certain criteria, the most signi cant of which are as follows:
Shareholder Activism Private equity is de ned to include houses that have a General Partner/Limited Yasser Akkaoui, Chairman/Shareholder Activist, Partner structure, investment companies and quasi-governmental entities that are run by, Capital Concept sal. and operate in the same way as, a private equity house. Venture capital for the purpose of this report is de ned as a fund speci cally dedicated Is A Private Equity Partner Beneficial To Your to venture capital investments. is includes funds by venture capital rms, and venture Family Business? funds under private equity rms. Khaled Baranbo, Investment & Business Development Manager, Funds managed from MENA, but whose focus is to invest solely outside the region, Abdullatif Alissa Group Holding Company are excluded from the fundraising and investment totals.
An open dialogue with the Securities MENA includes Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, & Commodities Authority Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, the United Arab By Dr. Ryan Lemand, Senior Economic Advisor & Head Emirates, and Yemen. of Risk Management, Securities & Commodities Authority Investment size represents the total investment (both the debt and equity portions). Survey However, fund size only considers equity invested, as we have no visibility on debt 8.1 Survey of General Partners (GP’s) In The MENA Region exposure by funds. 8.2 Respondent Profile 8.3 Survey Results e fund raising totals are the amounts closed/committed for fund raising funds, closed funds, investing funds, fully vested funds, and liquidated funds. Appendix 9.1 About The MENA Private Equity Association Exits are de ned to include partial exits, although simple dilutions have not been included. 9.2 Members Directory 9.3 Private Equity And Venture Capital Firms In MENA
12 13 1.2 De nitions and Assumptions Region: Statistics are based on the “market” approach and funds are categorized based on the intended destination for investments (as de ned in a fund’s announced mandate) as opposed to For analytical purposes, we have considered the following types of funds, as de ned by Zawya’s where the private equity rm is located. With regard to multi-region funds, we have included Private Equity Monitor: 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 Announced: O cial launch of funds which are yet to commence fund raising. source data does not provide visibility on primary geographic intention.
Rumored: Funds expected to announce their intention to commence fund raising. Funds established with a speci c mandate to invest in real estate are excluded from the fundraising, investment, and exit totals. e remaining real estate investments relate to funds with Fund raising: Funds that have been announced and are in the process of raising capital. mixed investment mandates.
Investing: Funds that have closed and are actively seeking and/or making investments. Conventional infrastructure funds, or funds investing directly in green eld infrastructure projects (e.g. bridges, roads, etc.), are excluded from fundraising totals. However, funds that make private Fully invested: Funds that have invested all capital raised. Some of the investments may have equity investments (determined based on target returns) in companies operating in the divested in this stage, but not all. infrastructure sector are included.
Liquidation: Funds that have divested all investments and have ful lled all obligations to share- EMPEA does not track or report other alternative asset classes, including hedge funds, real holders. estate funds, and conventional infrastructure funds. In our analysis we have excluded data from investment-type companies, real estate rms, and sovereign wealth funds. 1.3 Data Filtering
e primary data sourced from Zawya has been ltered according to the de nitions used in the Emerging Markets Private Equity Association (EMPEA) research methodology. In particular, we have used the following de nitions:
Fund Size: In the case of funds yet to make a rst close, or where no close information is avail- able, fund size is equivalent to the target amount, and is noted as such. For funds achieving at least one o cial close, fund size is reported as the capital raised to date, while for funds that have made a nal 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. rst 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 2 KPMG Introductory Message 3 Private Equity In The MENA Region KPMG is pleased to continue its association with the MENA Private Equity Association in, once 3.1 Summary again, producing the annual report on the private equity (PE) and venture capital (VC) industries in the MENA region. e private equity (PE) industry in the MENA region has demonstrated relatively at performance in 2013 with a marginal decrease in the number and total value of known investments compared 2013 continued to be a challenging year for the PE and VC industries in the region, with signs of a to the prior year. e fundraising environment also continued to remain relatively challenging decline in investment activity evident in the decrease in both the total number of transactions with a decrease in total funds raised during 2013 as compared to 2012. (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 Similar to many countries outside of the region, in particular those impacted by the Euro-zone non-cyclical and defensive sectors such as oil and gas and healthcare, investors are increasingly crisis, the total number of investments decreased from 101 in 2012 to 66 in 2013. e average broadening their focus across a range of sectors including food and beverage and investment size during 2013 at USD 15 million was broadly consistent with 2012 levels leisure/tourism, which were the two largest sectors of investment by value during 2013. e (USD 16 million) with the continuing focus on venture capital (VC), growth capital, and information technology (IT) sector continued to experience the most investments by volume SME investments. during 2013, although these investments on average are relatively smaller in value than in other sectors. Funds Raised & Investments Completed e u
l 8,000 120 ere is evidence to suggest that market sentiment and investment activity is improving in a v
t 7,113 n 100 101 countries such as Egypt, which have historically been impacted by the Arab Spring. While Egypt is e 7,000
m 93 100
t 91 yet to see a complete return in the levels of PE activity, it was one of the top three investment s e 6,000 v N n destinations within MENA by value and volume during 2013. o i 76
/ .
80
75 o
d 5,000 f
e 67
67
66 i s n i a 58 v r
Following a period of decline in 2011 and 2012, total funds raised during 2013 decreased from e
s 4,000 60 51 s t d 46 m 2012 levels (USD 0.7 billion in 2013 compared to USD 0.9 billion in 2012). While the reduced level of n
3,006 e u n
F 3,000 t
fundraising in 2012 and 2013 compared to earlier periods is partly re ective of the increased focus 40 s on venture capital and small- and medium enterprise-sized (SME) growth capital 2,000 1,177 1,224 1,154 1,057 20 investments, it also re ects the general lack of deal ow in the region as regional PE players 863 917 1,010 1,000 726 744 continue focusing on preserving and enhancing value from existing portfolios and preparing for 510 successful exits. at said, it is encouraging to note that there has been an increase in the total value 0 0 of funds announced (although we note that many are yet to close) during 2013, as compared 2008 2009 2010 2011 2012 2013 to the prior year (USD 2.6 billion in 2013 compared to USD 1.8 billion in 2012). Funds raised (left axis) Investment value (left axis) e medium to long-term outlook for the PE and VC industries in the region is positive. With the Total number of investments (right axis) ongoing slow down of the more mature markets in the West, the MENA region is likely to remain Number of investments with known value (right axis) a region of opportunity and a hub for PE and VC activity as its strong macro-fundamentals continue to drive the region’s economic road to recovery. 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 We would like to note that this report would not have been possible without the e orts of Zawya, the size data), total investments for 2013 will increase by USD 300 million to USD 1,010 million. MENA Private Equity Association, and the members of the annual report committee. We are Source: Zawya Private Equity Monitor grateful to them for sharing primary data and industry insights and we support the e orts of the Association in furthering the interests of private equity in this part of the world. PE and VC rms 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 Vikas Papriwal investments in 2013. Sectors that were most signi cantly impacted by the global nancial crisis, Partner – Transaction Services such as real estate, construction, and nancial services, continued to see low levels of investment KPMG activity in 2013. T: + 971 4 403 0300 E: [email protected]
16 17 Continuing the trend seen in recent years, and supported by their favorable demographics, the 3.2 Funds United Arab Emirates (UAE), Egypt (despite social unrest), and Lebanon remained popular destinations for investment in 2013. e Kingdom of Saudi Arabia (KSA) continued to attract the 3.2.1 Funds Raised to Date 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 e ongoing global macroeconomic challenges, driven primarily by the continuing uncertainty in and therefore are excluded from our data set. While investment volume in Egypt was lower in 2013 Europe, has created a di cult fundraising environment with just USD 744 million of funds raised compared to the previous year, we expect investment activity to return to historical levels in the during 2013 compared to USD 863 million in 2012. However, there are some positive signs that short- to medium-term. 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. 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 e reduced level of fundraising may also be partly attributable to the increased focus by many announced). 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 e MENA region’s economic demographics remain strong, particularly following various nancial e ort to realize returns for their LPs. 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 While the number of funds which successfully raised capital in 2013 decreased compared to the barrel, the regional economy is expected to continue recovering with signi cant planned period 2010 to 2012, the average close per fund increased to USD 74 million (from USD 43 million investment in infrastructure, healthcare, and education. in 2012), reecting an improvement in investor sentiments.
e 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 Funds Raised (USD 0.7 billion) decreased on 2012 levels (USD 0.9 billion). We continue to see a focus towards 8 ,000 7,113 40 funds with a growth capital, VC, and SME investment focus, which tend to be smaller in size 7 ,000 35 compared to buyout funds, which were prevalent in 2007 and 2008. Successfully raised funds in 36 6 ,000 30 N 2013 had an average close of USD 74 million compared to USD 43 million in 2012. o .
5 ,000 25 o f
21 c m 20 l o s $ 4 ,000 20 To some extent, the at level of fundraising may be attributable to the increased focus by many 17 e s regional PE players on managing their current portfolios. Furthermore, fund managers with legacy 3 ,000 10 15 funds dating back to 2008 and 2009 are focusing more on executing exits and realizing returns for 10 2 ,000 10 their LPs. 1,224 1,057 863 1 ,000 726 744 5 e 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 2008 2009 2010 2011 2012 2013 billion. is 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 Funds raised ($m) No. of closes players in the region have stepped up fund raising e orts particularly during Q4 of 2013 and Q1 of 2014. Investors are increasingly deploying funds on a deal-by-deal basis, instead of launching Source: Zawya Private Equity Monitor speci c 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 From our experience of the market, key PE players in the region have stepped up fund raising already made opportunistic exits, many are faced with increasing pressure to sell and return funds to e orts particularly during Q4 of 2013 and Q1 of 2014. Investors are increasingly deploying funds their LPs. ere was a decrease in the number of exits completed during 2012 and 2013 (37 on a deal-by-deal basis, instead of launching speci c funds. Deal-by-deal deployment of funds is not combined), compared to a total of 51 during 2010 and 2011. Despite this decline in exit volume, captured in our data set. we expect an increase in exit activity over the next year.
18 19 Cumulative Funds Under Management Since 2000 During 2013, there were three funds that raised capital of more than USD 100 million. e largest raised capital was USD 350 million by the ICD Food & Agribusiness Fund, which has a focus on growth capital. 24,250 25,000 23,506 22,643 21,586 Out of the major funds that raised capital in 2013, only two funds were announced in 2013 and the 20,363 19,636 remaining funds were announced prior to 2013 (across 2011 and 2012). Consistent with trends in ) 20,000 the past, the average time taken for PE funds to successfully close from the date of announcement m
$ ( remains greater than 12 months. Out of the 16 new funds announced in 2013 s d with a combined ITS of USD 2.6 billion, only two funds recorded a successful close during their n u
f 15,000 rst year, representing 11% of the combined initial target size (ITS) of funds announced in 2013. e v i t a l u 10,000
m Funds Raised By Type u C
5,000 8,000 7,115 Growth Capital 7,000 Venture Capital - 6,000 Balanced Fund Buyout
2008 2009 2010 2011 2012 2013 m 5,000 $ Capital Development Source: Zawya Private Equity Monitor 4,000 Distressed Energy and Power Cumulative funds under management increased to USD 24.3 billion in 2013. 3,000 Mezzanine Capital 2,000 Pre-IPO e following table details major funds that successfully closed during 2013. 1,223 1,057 Secondary Investments 1,000 726 863 744 Major funds raised in 2013 SME Growth Capital Fund Investment “Announcement “Funds raised - Fund name ITS ($m) Close Manager Focus year” in 2013 ($m)” 2008 2009 2010 2011 2012 2013 ICD Food & Agribusiness To be First 1 Growth Capital 2012 600 350 Fund Announced close NBK Capital Equity NBK Capital First 2 Growth Capital 2013 300 195 Partners Fund II Limited close Source: Zawya Private Equity Monitor Capital North Africa First 3 Capital Invest Growth Capital 2011 115 103 Venture Fund II close Samena Special Situation Samena Second 2013 continued the trend towards a high proportion of growth capital and venture capital, with all 4 Growth Capital 2011 700 25 Fund II (SSSF II) Capital close of the 9 funds successfully closing during the year having a growth capital or VC investment focus. “Gulf Credit Opportunities Fund L.P. I (formerly Second 5 Gulf Capital Growth Capital 2011 300 20 e rise of growth capital and VC funds from 2011 onwards is a re ection of opportunities being known as Gulf Credit close Partners)” sought a er by fund managers. In an emerging region where returns are characterized by earnings Cairo Financial First growth as opposed to leverage, growth capital funds have become increasingly popular due to the 6 Bidaya Fund Growth Capital 2012 40 19 Holding close perceived growth prospects yielding higher returns and better value. “Accelerator First 7 Badia Impact Fund Technology Venture Capital 2012 25 17 close Holdings” FCPR Tuninvest Tuninvest First 8 Growth Capital 2013 22 10 Croissance Finance Group close “Gulf Credit Opportunities Fund L.P. I (formerly Third 9 Gulf Capital Growth Capital 2011 300 6 known as Gulf Credit close Partners)” Total 744
Note: Gulf Credit Opportunities Fund closed twice during 2013 (combined amounts raised of USD 25 million).
Source: Zawya Private Equity Monitor
20 21 Funds Raised By ITS Size 3.3 Investments 10,000 8,904 9,000 3.3.1 Information Limitations 8,000 7,000 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 6,000 5,687 m
revealed the size of the investment. Approximately 30% of announced investments in 2013 have $ 5,000 not publicly disclosed their size. 4,000 3,107 3,000 2,874 We also note that 2008 to 2012 gures in the current year report will not equal prior year report as data changes year on year based on new announcements made. 2,000 1,526 1,751 1,000 Additionally, in the absence of comprehensive information on nancing structures used by PE - houses for funding transactions, we are unable to analyze and comment on the debt/equity nancing strategies used for structuring investments. Hence, deal sizes are reported as total 2008 2009 2010 2011 2012 2013 transaction size rather than equity investment. 0-499m 500-999m 1000 m+ 3.3.2 Investments Made to Date Source: Zawya Private Equity Monitor
One of the common characteristics of growth capital and VC funds is that their investments tend Investment Value By Volume & Year to be comparatively smaller minority stake investments. is is re ected 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. 3,500 120 3,006 101 3,000 100 Total Active Funds By Volume 2000 100 91 93 2,500 75 76 80 67 66 2,000 67 Announced 58 51 60 7% 1,500 46 Fully vested 1,177 1,154 13% 917 40 1,000 710 210 500 20
Investing 0 0 50% 2008 2009 2010 2011 2012 2013 Invest Value No. of invests with value Fund Raising Total no. of invests 30%
Source: Zawya Private Equity Monitor
Source: Zawya Private Equity Monitor e total number of PE investments completed by MENA PE funds has decreased from 101 in 2012 to 66 in 2013. 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 Despite an overall increase in liquidity in the region, the level has not yet recovered to the 2008 vested and 30% raising capital. level. Furthermore, the IPO market both locally and globally is yet to see any signi cant resurgence. As a result, PE remains a key funding option for companies looking for access to new capital.
22 23 Based on those investments with a known value, the average investment size of transactions While Egypt has seen the largest number of PE investments since 2006 (18%), the ongoing completed during 2013 remains broadly consistent with 2012 levels at USD 15 million. As political uncertainty in the country since 2011 has resulted in a decline in total value of investment previously discussed, we have seen an increase in growth capital VC and SME investments, which in the country. However, given its strong demographics, the country has maintained its volume of are generally lower value, minority interest investments. ere has been an absence of large buy investment activity (20% in 2013). As the country transitions towards regaining political stability, out deals post global nancial crisis and this is anticipated to remain the case for the next 12 to 18 PE deal activity and value of investments made are gradually expected to return to levels months. experienced prior to 2011.
e table below presents the top 10 investments by size. e 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 Top ten investments in 2013 - by value Partners II’s investment of approximately USD 50 million in OCB Oil eld Services Free Zone Fund name Target company Country Sector Company. e UAE continues to be a popular destination for fund managers and, given the size Greater than $25m and dynamic nature of the economy, it is unlikely that this trend will change going forward. 1. Abraaj Private Equity Fund IV Fan Milk Ghana Consumer goods 2. Investcorp Gulf Opportunity Fund I B.S.C. Leejam Sports Company Saudi Arabia Leisure and Tourism During 2013, 6% of investments involved target companies outside of the MENA region. Turkey 3. Gulf Capital Equity Partners II Chef Middle East Qatar Food and Beverages proved to be the most attractive country outside of the region, with 1% of the total number of 4. Gulf Capital Equity Partners II OCB Oil eld Services Free UAE Oil and Gas investments made in 2013. Turkey’s growing population, rising infrastructure spend, stable Zone Company political environment, and close proximity to both Europe and MENA has made it a popular 5. NBK Capital Mezzanine Fund I Al Rowad Saudi Arabia Education destination for investments. 6. NBK Capital Equity Partners Fund II Shakespeare and Co. UAE Food and Beverages Less than $25m We understand that while several PE investments took place in KSA in 2013, not all of these deals 7. Beltone Capital Holding for Financial Total Egypt Egypt Oil and Gas have been made public. erefore, KSA may be under-represented in the data with only 12% of Investments S.A.E. regional PE investments in 2013. 8. CedarBridge Partners Fund I Dreamworks Spa UAE Leisure and Tourism 9. Gulf Credit Opportunities Fund L.P. I Turknet Iletisim Hizmetleri Turkey Telecommunications A.S. 10. Samena Special Situation Fund II Samena Connect Company ASEAN Transport 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. Investment Volume By Sector Since 2006 Investment Volume By Sector in 2013 ere were a further ve 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, re ecting the continuing prominence of this sector in the region. e oil and gas Manufacturing 3% Education sector continues to attract PE investment, enhanced by aging infrastructure with o shore and Education 1% Information Other Telecoms Manufacturing 3% onshore elds requiring maintenance, modi cation, or an increase in production capacity. Technology 3% 3% 10% 17% Transport Information 3.4 Regional Focus Telecoms 5% 4% Technology Media 30% Oil & Gas 6% Regional Split of Investment Regional Split of Investment 9% Volume Since 2006 Volume in 2013 Leisure Lebanon 6% Lebanon Jordan Jordan Kuwait 18% 6% 11% Health care Tunisia 7% 5% Other MENA Tunisia 6% 7% Other MENA Food & Beverages 9% 1% Turkey Other Turkey 8% 1% 28% Consumer goods 8% Saudi Arabia Saudi Arabia 7% 4% 5% 12% Other Other Outside Food & Beverages Oil & Gas 6% Consumer goods 13% Outside MENA 6% 17% Morocco MENA Morocco [5%] 9% 13% [9%] 4% Transport Media Leisure Health care 6% 4% 2% 9% Egypt UAE 20% Egypt UAE 20% 18% 15% Source: Zawya Private Equity Monitor
Source: Zawya Private Equity Monitor
24 25 e proportion of investments by volume attributable to the information technology, media, e impact of the global nancial crisis on liquidity, valuations, and investor appetite has resulted telecoms (TMT), and healthcare sectors has increased in recent years. Information technology in longer than anticipated holding horizons for PE investments. As a result, the number of exits accounted for 30% of the total investment volume in 2013. It is important to note that the majority of completed during 2012 and 2013 decreased when compared to 2010 and 2011. information technology investments were venture capital in nature (19 out of 20 investments), hence were smaller in terms of investment value. 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 Key sectors of investment for the PE rms continued to be the non-cyclical sectors such as oil and gas some funds have already made opportunistic exits, many are now faced with the increasing and healthcare, which accounted for nearly 26% of the total investments by volume in 2013. pressure to sell down and realize value for their LPs. erefore, one would expect that as the regional economies stabilize and liquidity in the market continues to improve, a further As expected, the sectors most heavily impacted by the global nancial crisis, such as increase in the number of divestments will occur in the short- to medium-term. construction, real estate, and nancial services, have fallen behind. e challenges faced by the nancial services sector continued in 2013 with reduced level of investments. 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 While the industry in general continued to invest cautiously favoring the non-cyclical and defensive Noor Hospital (Ithmar Capital) and Gulf Marine Services (Gulf Capital) on the London sectors such as oil and gas and healthcare, investors are increasingly broadening their focus across Stock Exchange and Sotipapier (Swicorp) on the Tunis Stock Exchange. a range of sectors including food and beverage and leisure/tourism, which were the two largest sectors of investment by value during 2013. 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. 3.6 Exits
No. Of Divestments & Exit Value
3,500 3,314 40 34 3,000 35
28 30 2,500 No. of divestments
25 2,000 21
m 20
$ 17 17 17 17 1,804 1,500 16 15 1,180 1,000 9 8 8 10 7 389 500 5 156 117 - - 2008 2009 2010 2011 2012 2013
Total value of divestments ($M) No. of divestments
No. of divestments with exit value
Source: Zawya Private Equity Monitor
26 27 The MENA Merger and Acquisition Graph 2: Average M&A Deal Sizes in MENA Over the Past Decade $283 Market Over The Past Decade $267 Average deal size (in mn) $217 4 Steady recovery By Anthony Hobeika, Head of Research and Strategy, Gulf Capital Pvt. JSC since 2009 $158 $146 $128 $89 $98 e merger and acquisition (M&A) market in the MENA region has been on a recovery path since $76 2009, following a drop from peak levels reached in 2008. During the last ve years, the regional $67 deal-making activity has evolved on many fronts, laying a solid foundation for future growth.
Measured by the announced value of completed deals in the region (excluding buybacks, IPOs, and 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 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- nancial Source: Thomson One, Gulf Capital Research crisis era. is 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 ve years maintained a When benchmarked against the global M&A market, the MENA deal-making activity is on a stable performance, at levels slightly lower than the 2008 numbers. long-term growth trajectory and is outperforming many peer regions (Graph 3). However, when compared to the size of its economy, MENA’s M&A market remains relatively small, but has su cient room for future growth. e total M&A deals during the period 2009-2013 represent Graph 1: Breakdown of M&A Deals in MENA by Year a mere 3% of the 2013 GDP, compared to a much higher ratio of 13% globally (Graph 4). Over the Past Decade
$36 Total deal value (in bn) 483 Graph 4: Ratio of Total 80 422 Graph 3: Cumulative %age Share of MENA M&A Deals $26 M&A Deal Values 368 368 349 321 in Global M&A Deals Since 2004 $22 $24 2009-2014 to GDP 2013 $18 249 %age share in Global M&A Deal volume 0.90% $16 Steady recovery MENA %age share in Global M&A Deal value 0.84% 0.87% $13 since 2009 0.80% Global 13% 152 $10 0.75% 113 0.72% 0.72% 0.69% 0.70% $3 $5 0.64% 0.64% 0.65% Su cient room for 0.46% 0.46% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 0.38% future growth 0.34% 0.39% Growing MENA M&A 0.30% relative market size 3% Source: Thomson One, Gulf Capital Research 0.18% 0.21%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total M&As to GDP Ratio
is trend of rising deal values and stable deal volumes indicates a resumption of the rise in the Source: Thomson One, Gulf Capital Research 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.
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 bene t 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 5: Breakdown of the Value of Graph 6: Breakdown of the number of Graph 9: Historical % Share of Foreign Players in Total MENA M&As M&A Deals by Geography Deals by Geography 38% 2004-2008 Besides GCC, Egypt, Morocco 2004-2008 2009-2013 % of total deal value and Jordan are active 2009-2013 (14% excl. GCC and some North 61% 61% 56% Lafarge/OCI 25% Africa Account for the 24% 25% 53% 23% deal) 22% 19% 58% bulk of M&As 17% 16% 15% 41% 40% 13% 13%13% 43% 37% 11% 10% 10% 10% 38% 34% 10% 9% 9% 27% 30% 9% 8% 8% 5% 34% 31% 34% 7% 7% 4% 6% 4% 4% 3% 4% 24% 24% 22% 1% 2% 12% Noticeable foreign participation, on a gradual uptrend since 2007
Egypt UAE Morocco Kuwait KSA Qatar Iraq Others Jordan UAE Egypt KSA Kuwait MoroccoOman Bahrain Others 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Thomson One, Gulf Capital Research Source: Thomson One, Gulf Capital Research
In terms of industries, the cyclical sectors have accounted for the bulk of the regional M&As over the Whether the acquirer is a local or foreign entity, the considerations sought in the regional deals are past decade. In particular, the nancial, telecommunications, industry, oil and gas, and real estate largely majority stakes (Graph 10). In fact, while these stakes have averaged approximately 50% or sectors are the primary recipients of deals. ese segments have witnessed some of the largest slightly less during the past years, the percentage owned a er successive M&As targeting the same transactions in the market. company was, in most cases, majority. is indicates acquirers’ intentions to build control over their target entities.
Graph 7: Breakdown of the Value of Graph 8: Breakdown of the Number of M&A Deals by Industry M&A Deals by Industry Graph 10: Historical Average Acquisition Stakes Per Deal in MENA 20% 2004-2008 19% 2004-2008 18% Cyclical Sectors are Cyclical Sectors are 2009-2013 2009-2013 % bought during deal 15% the largest recipients the largest recipients 14% 80% % owned after deal 11% 9% 9% 9% 758% 6% 70% 73% 5% 5% 5% 4% 4% 67% 68% 3% 2% 3% 2% 3% 2% 2% 60% 60% 608% 2% 2% 2% 2% 1% 1% 1% 1% 1% 59% 0.31% 51% 50% 50% 0% 48% 0.49% 42% 35% 41%
F&B F&B 30%
O&G O&G Building majority stakes are the most
Pharma.
Pharma.
Industry Industry sought in MENA M&A deals
Telecoms
Telecoms
Transport
Transport
Insurance
Insurance
Financials
Financials
Wholesale
Wholesale
Hospitality
Hospitality
Realestate
Healthcare
Realestate
Healthcare
Agriculture
Agriculture
Construction
Construction
Business Serv. Business
Business Serv. Business
Power & Water & Power
Power Water & Power
2004 2005 2006 2007 2008 2009 2010 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 ve 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 Shareholder Activism 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 5 premium of 1% to emerging countries and a discount of 8% to advanced countries. By Yasser Akkaoui, Chairman/Shareholder Activist, Capital Concept sal.
Graph 11: Average 2009-13 Deal Valuation Multiples Mr. Yasser Akkaoui is the founder and chairman of Capital Concept sal. Since 2004, Mr. Akkaoui has been reinforcing MENA M&A valuations in line 13.7x corporate governance and shareholder activism in the Middle 12.6x with global trends 12.4x MENA East. In 2013, he developed the Governance and Integrity 9.6x Emerging Rating (GIR), the rst independent corporate governance rating 8.9x 8.1x Advanced methodology worldwide, which was then followed by the Investors for Governance and Integrity (IGI) declaration.
It is time for investors to increase e orts in reinforcing their rights. Enterprise Value to EBITDA ratio Deal Equity Value to Net Income ratio It is time for shareholders to stand up for their rights. It is time for shareholders to Source: Thomson One, Gulf Capital Research 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 recon rm their rights in a constructive way. is 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? ere are 1,304 companies listed on the seventeen Arab exchanges, from Morocco to Yemen. ere 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. e shareholder base is very low and the oats of these companies are very limited. Many companies su er 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. ey oen 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 a orded the opportunity to add e system permits shareholders to more proactively participate during general assembly items to the agenda. ey want to know their vote counts and that their opinion contributes to the meetings and board meetings to ensure corporate governance is prioritized. It allows board business, nancial, and other signi cant decisions of the board. members to assume an e cient and e ective role during board terms by placing corporate governance-related concerns on assembly and board meeting agendas, which, when taken Since 2010, shareholder activism has been rede ned. Shareholder activists are no longer labeled seriously, strengthens shareholders’ con dence in their investments. “corporate raiders.” ey are more aptly described as unsatis ed shareholders discontent with the level of commitment of a company in protecting their interests. GIR can also be utilized by companies and nancial institutions that seek to identify areas of improvement in their corporate governance programs and who are progressive enough to e risk emanating from the lack of governance standards is a factor in deterring potential immediately respond and implement changes. ese companies will be positioned at the investors, whether local or international, who are interested in emerging and frontier markets. e forefront of corporate governance compliance, positively reinforcing their reputation to existing major deterrents for investors in these markets are weaknesses in governance that provide neither and future investors. complete information nor guarantees for investors to exercise their rights. GIR is useful on a pre-deal level. Investors such as private equity funds have integrated GIR into e MENA region, with all of its challenges, remains a very appealing market for investing growth their due diligence for target investee companies, especially in emerging markets and frontier capital. Its rapid and continuous development with little to no leveraging makes it an attractive markets where transparency is not the norm. Information that GIR provides on companies in investment destination. However, the lack of transparency and weak protection of shareholder emerging markets is priceless and can identify areas of corporate governance risk to promote rights is not encouraging foreign direct investment. transparency and accountability.
When in New York in February, I visited the largest funds in the United States (US) and met with In an e ort to protect shareholders’ rights, GIR operates on an ad-hoc level whenever a the leading Arab investors based there. e resounding consensus was that the lack of shareholder feels that his or her rights are violated or not respected. GIR supports launching an transparency and dearth of protection of shareholder rights discounts the region from US investigation around such violations, informing the entire investment community and alerting local investment radars. is lack of satisfaction necessitates a shareholder-driven solution that and regional regulators who are urged to immediately take action to preserve the rights of encourages shareholder communication of expectations to companies, regulators, central banks, shareholders. and capital markets authorities to reinstate con dence in investee companies. In tandem with GIR, a signatory declaration was needed. erefore, Capital Concept launched We assessed this urgency and concluded that an optimal solution is to design a corporate the Investors for Governance & Integrity (IGI), which convenes like-minded investors and governance rating methodology that clearly responds to shareholder needs As such, we created the corporations that recognize the importance of corporate governance in mitigating risk on a Governance and Integrity Rating (GIR). GIR allows the nancial community to manage macroeconomic level, including its microeconomic implications. ese investors seek data that governance risk for the bene t of shareholders by providing rating scores and rubrics that are identi es the most favorable geographies in which to invest and facilitates foreign direct critical for assessing governance structures. investment to the MENA region that ful lls global economic development outcomes.
It acknowledges the expectations, concerns, and challenges in corporate governance that are Since the launch of GIR, awareness of its presence is growing among private equity funds. New deterring potential investors. Companies that implement corporate governance practices funds are signing the IGI declaration each month to show support for a risk-free investment. beyond the Capital Markets Authorities’ requirements now can comply with GIR standards to Increasingly, funds are integrating IGI on a pre-deal or due diligence level. instill an additional level of investor con dence. Shareholder activism is burgeoning and crucial to the progression and advancement of the GIR provides shareholders with the rst independent corporate governance rating methodology MENA nancial industry. It is time for local shareholders to exercise their rights to play a regionally and internationally. GIR’s concept stemmed from working alongside shareholders, proactive role in the success of the companies they invest in and the nancial industry in general. investment development funds, private equity funds, pension funds, mutual funds, family o ces, and regulators, including the Organisation for Economic Co-operation and Development (OECD), Reinforcing the implementation of best-in-class corporate governance can only be achieved in the central banks, and capital markets authorities. 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. e methodology employed delivers to shareholders critical information about the company they have invested in or a target company they are assessing. e indices help analyze the company’s level of commitment to corporate governance, as well as serve as a dashboard to monitor the company’s advancement and the progressiveness.
34 35 b) Strategic Planning and Performance Management: Private equity professionals help the Is A Private Equity Partner target company to devise a coherent strategic plan. ey design proper corporate performance management processes that ensure control over strategy implementation and devise objective Beneficial To Your Family Business? management incentives schemes that are linked to the achievement of business objectives.
6 c) Strengthening and Incentivizing the Management Team: Private equity professionals conduct a detailed review of the organization structure to con rm whether the current structure is optimal for the future business plan and assess the need to bring additional talent on board. ey 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.
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. ey institute a strong corporate governance system By Khaled Baranbo, Investment & Business that encourages shared and independent decision making. Development Manager, Abdullatif Alissa Group Holding Company e) Capital Structure: Private equity professionals o er expert advice on the nancial restructuring of the target company, which results in increased pro tability and cash ow, coupled with a healthier balance sheet. Additionally, they help the target company build strong Family businesses account for three-fourths of the private-sector economy in the MENA region. relationship with the banks, thus reducing nancing costs. 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 f) Business Development: Private equity professionals leverage their local and international sensitive matter. Such transactions require a clear understanding of cultural di erences and local networks to support investee companies in growing organically, whether it is through the addition business practices. Moreover, private equity investors should demonstrate the value addition of new products or services or geographic expansion. that they contribute to the family business, as well as establish good rapport with the business owners and appreciate the signi cance of the family’s achievements. In order to build strong and g) Mergers & Acquisitions: Private equity professionals support investee companies in growing healthy relationships with family businesses, private equity investors should fairly value the inorganically by systematically screening the market for potential value adding acquisition company and equitably structure the deal, in addition to sharing the long-term vision of the opportunities and executing such transactions capitalizing on their deal-making expertise. family shareholders. h) Better Exit Opportunities to Family Business Shareholders: Historically, companies that e business model of private equity investing is to exit acquired portfolio companies at higher were owned by private equity investors were sold at premiums compared to other family values than their respective entry prices. Such increases in portfolio company valuation usually businesses that were not owned by private equity. Private equity professionals possess expertise result from both improved nancial performance and higher exit multiples. Much of the e orts of in navigating through IPO processes, which many family owned businesses lack. In many private equity investment professionals during the investment life cycle (deal origination, due cases, depending on the growth potential of the company and the size of their retained stake, family diligence, closing, value creation, and exit) should focus on these two elements. business owners can make as much or more from their minority interest as they did from selling their majority interest. Following are major performance levers that are used by private equity professionals to add value to investee family businesses to improve their business and nancial performance i) Succession Planning: Sometimes, next generation family members are either not inclined to take prospects and to position the business appropriately for a lucrative exit: 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 a) Shared Risk: Sometimes family business owners are not willing to invest heavily to drive the management or second-generation family members assume leadership. Private equity can be business through its next growth phase. In these circumstances, a partnership with a private an important solution to these business challenges, by taking an objective view of the needs equity group can provide business owners with peace of mind knowing that they have of the business. Private equity investors can facilitate critical mediation between various branches securitized a part of their net worth and partnered with competent investors who are looking of the family business during transition periods and can introduce a professional management team for ways to bring the business to its next level. As a partnership, the family business can to ensure a smooth transfer of control. ey focus on building a strong management team and continue to grow and legacy owners can continue to nancially participate in that growth look beyond the familial and legacy issues to build the best team for the job at hand in the best without the concern associated with re-investing more of their own net worth back in the interest of the business. business.
36 37 is regulation is exible enough to accommodate private equity and venture capital funds and An open dialogue with the Securities 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 & commodities Authority activities, reducing further what previously was a substantial grey area. With the focus of the 7 regulation rm 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, nancial system.
e primary contribution of the mutual fund regulation is its provision of a solid, fair, and transparent legislative framework that clari es 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.
Such instruments have been gradually regulated and accepted by the SCA over the past few years. By Dr. Ryan Lemand With the addition of the mutual fund regulation (decision 37), they form a veritable toolbox of Senior Economic ADvisor & Head of Risk Management, resources for investment managers. Securities and Commodities Authority ese resources include licenses for establishing or marketing mutual funds. By providing two simple In accordance with the UAE government’s vision of developing the capital market and categories for foreign and local funds and an approval for promotion material, the applicant is able to contributing to national economic growth, the Securities and Commodities Authority (SCA, or clearly identify the starting point of the authorization process. “ e Authority”) sought to bridge the gap between global investment management requirements and the opportunities o ered by the rapidly expanding UAE economy. Another resource is the set of legal regulations for operating an investment management company, nancial consultancy, and custodians. Whether the applicant desires to participate in the UAE In designing the decision 37/2012, which pertains to mutual funds, the SCA aims to make the UAE investment management sector as a fund manager, in a research plus advisory capacity, or as an asset an attractive and hospitable environment for mutual funds. manager solution provider, the licensing process is clear and time-bound to ensure certainty of execution and optimal planning to launch in the UAE. Since the rst publication in August 2012, fund managers and compliance o cers have familiarized themselves with this mutual fund regulation. e Authority has processed over 400 e regulatory framework is completed by advanced market-making solutions such as short selling, applications and found that the majority of applicants had a clear idea of what the new regulation lending and borrowing securities, and liquidity provisions. e availability of these three tools consists. It is therefore the purpose of this introduction, not to delve in the details, but to present translate into the following e ect: local market access providers can ensure that the fund manager will the big picture so that market participants can bene t fully from the mutual fund regulation. nd 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 Rather than simply adding a layer of red tape, the Authority designed this regulation to provide a of bank liquidity. e presence of delivery-versus-payment settlement also removes operational risks landing path for mutual funds being established in the UAE and the greater MENA region. 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. e 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 In the constantly expanding and connecting global nancial system, ensuring information integrity is investment funds, thus helping identify opportunities for nancial services providers, a necessary crucial. Most market abuse events happen due to misuse of information. Implementing the XBRL element of the ecosystem that the Authority aims to create. data framework is a long-term goal the Authority has been tirelessly working toward since 2011. is framework will bring state-of-the-art communications technology to UAE nancial markets, which In ruling on acceptable marketing practices, the Authority has le a wide spectrum of tools freely will a ect all facets of the securities markets, including the investment management sector. XBRL will accessible and limited the regulatory impact on what matters most: protecting investors’ rights and allow for transparent, available, and reliable nancial data as a standard, and not an expensive market integrity. e necessary focus on cross-border investments and the experience of the UAE privilege. is will strengthen market integrity, facilitate ows, and expand the reach and the potential as an international trading hub allowed the Authority to develop the mutual fund regulation in a client base of investment funds. way that retain attractiveness and visibility within the regional competing nancial markets, without compromising high standards. 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 bene t from world-class services.
38 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 Survey companies by utilizing the aforementioned levers. In addition, family-owned businesses maintain distinctive advantages over typical private equity players, such as the following: 8
a) Longer Time Horizon: Most of the private equity investments executed by family groups are 8.1 Survey of General Partners (GP’s) in the MENA Region long-term in nature and not bound by a de nitive exit horizon. us, the target company e survey focuses on GPs in the MENA region. e survey consisted of 39 questions and was shareholders consider the family group as an integral long-term partner of their family conducted during the second quarter of 2014. e aim of the survey was to obtain a greater business, in comparison to private equity funds that require an exit in ve to seven years. understanding of the sentiments of the MENA region’s PE industry from the perspective of GPs.
b) Cultural Sync: One of the primary reasons some private equity investments fail is the Methodology: cultural shock that family business shareholders experience when the new private equity e survey was prepared by Zawya and was conducted online with participation from investor takes over and forces its approach. Unlike some private equity funds, family-owned representatives of 21 private equity rms in the MENA region. Participating rms had investments groups know the regional cultural sensitivities and are better equipped to manage change in a range of industries across a wide geographical area. smoothly. Scope Of e Survey c) Prestige and Network: Many small and medium enterprises prefer to be associated with large e survey brie y examines the impact of the economic downturn and political instability in the family groups because they are highly regarded in social circles that connect to signi cant region during the period 2011 to 2013, and aims to understand GP expectations and views around business networks. the outlook for 2014.
e performance levers utilized by the private equity investor during the investment life cycle with 8.2 Respondent Pro le the objective of achieving superior returns on invested capital are naturally in the best interest of Forty-one percent of the respondents established their private equity rms within the last ve years, the investee family business and shareholders thereof, due to the inherent alignment of interest in with approximately one-third being in their h year of operation. e private equity industry in such equity partnership. Hence, there are many bene ts of having a private equity investor as a the MENA region is relatively young by international standards. Fi y- ve percent of participating partner in the growth story of a family owned business. rms have less than USD 500 million worth of assets under management.
8.3 Survey Results When was the company established?
Company Age Participant’s Country Of Establishment
Kuwait Egypt 5% Saudi Arabia 14% More than 5 years 5 years 24% 59% 14%
4 years 14% Lebanon UAE 14% 33% Qatar 3 years Jordan 5% 13% 5%
40 41 While the private equity industry in the MENA region is still nascent compared to more What is the total value of assets under management? developed markets, more than half of the participating private equity rms have been in operation for more than ve years. Total Assets Under Management e majority of the participating private equity rms (33 percent) are based in the UAE. However, while these rms are based in the UAE, their investment focus is regional. $501M - $1000M + $1000M 18% 18% Who owns the fund management company?
$251M - $500M Undisclosed Ownership Of The Fund Management Company 23% 9%
Majority owned by the management $101M - $250M $51M - $100M 32% 9% 23% Minority owned by management 54%
Fi y- ve percent of respondents have less than USD 500 million worth of assets under Management has management. is is not surprising given the nature of investments in the region are o en small to no ownership in the management mid cap, minority stake investments. 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%
9% 5%
1-3 4 5 > 5 14% 9% 4% With the increase in the proportion of private equity rms having been established for more than ve years (from 50 percent in 2011 to 59 percent in 2012 and 2013), it is logical that there will be an 1-4 5-9 10-14 Other increase in the number of investments in a portfolio. is is a positive trend, as it shows that private equity rms continue to invest, despite global challenges. 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 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?
Main Challenged For e MENA PE Industry In 2014 Entry Deals Expected To Take Place in 2014
Quality deal ow 18% Infrastructure 5% High valuations 17% Venture Capital Growth Capital 14% Corporate governance 13% 27% Human capital expertise 12%
Market regulations 11% Buyout 18% De ciency in bank nancing 10% De ciency in control ideas 9% Real estate 9% Acceptance of PE funds partners 27% De ciency in intermediation 1%
Approximately one-third of respondents (36 percent) believe that growth capital investments will Over half (64 percent) of respondents are more concerned about “portfolio level issues” continue to be popular in 2014. It is encouraging to note that 18 percent of respondents expect (corporate governance, human capital, acceptance of private equity funds as partners, market buyout deals to be popular in 2014, which indicates that fund managers do expect some regulations, lack of control over deals, and lack of bank nancing). About one-third of the comparatively higher value private equity deals to take place in the region. respondents (35 percent) believe that “ nding the right deal at the right price” (quality of deal ow and appropriate valuations) will be a key challenge during 2014. What will be the average deal size in 2014? What is the most important attribute for a private equity rm to win a deal? In Your Opinion, What Will Be e Average Deal Size in 2014
e Most Important Attribute Required To Win A Deal Is: 50%
Accessibility to capita Network and 9% Sector specialisation proprietary contacts [percentage] 41% 18% 14% 9% 9% Management and operational expenses 18% Less than $10M $10M - $20M $24M - $40M $40M - $60M > $60M
Reputation 23%
Half of the respondents believe that the average deal size will be between USD 20 million and USD 40 A good network and proprietary contacts, combined with reputation (i.e. a proven track record), is million. is re ects positive investor sentiment, but also continued prudence of investors. seen by a large proportion of respondents (64 percent) as the most important attributes required to successfully complete acquisitions in the region. is 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 rm to win a deal.
44 45 How many funds do you expect to be launched/raised in 2014? In your opinion, what will be the main source for new funds to be launched in 2014?
Funds Expected To Be Launched/Raised During 2014 Main Source For New Funds Launched In 2014
Other 9% International Other Regional high net Institutional 5% None investors 9% worth individuals 32% 18% Less than 5 45% 5 18%
Regional SWFs 9% Regional Institutional More than 5 investors 23% 32%
In line with last year’s 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 e majority of respondents remain cautious about fundraising prospects for 2014 and believe funds. International institutional investors are also expected to provide a prominent source of that fewer than ve funds will be successfully launched. 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 e Type Of Funds Raised In 2014 In Your Opinion, What Will Be e Average Size Of Funds Raised In 2014
Distressed (Special Secondary Investments 41% Situation Funds) 5% 3% Mezzanine 32% Growth Capital 3% 23% Real Estate 12%
Pre-IPO 13% 9% Buyout 9% 18% 5% Infrastructure Venture Capital 11% 16% None ≤ $100M $101M - $250M $251M - $500M $501M - $1000M
Respondents believe that the majority of funds will be growth capital (23 percent), buyout e vast majority of respondents (73 percent) believe that the average size of funds raised in (18 percent) and venture capital (16 percent). 2014 will be between USD 100 million and USD 500 million. is re ects 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 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 Target Market Do You Plan To Launch A New Fund/New Funds in 2014 Not planning to launch funds No speci c Buyout this year 36% To regional HNW Market 18% 32% 18% No 14% Growth Capital Venture Capital To international 36% 14% institutions 18%
Infrastructure 5% Real Estate 9% Mezzanine To regional Yes 9% institutions 86% 36%
Similar to the prior year’s 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 ve funds to be Similar to last year’s survey, over 10 percent of private equity rms in the region perceive launched in 2013, the vast majority of respondents (86 percent or 18 fund managers) are international institutional investors as the target market for funds to be launched (18 percent in planning to launch a new fund in 2014. Fourteen percent of respondents state that they 2012). In 2012’s survey, international institutional investors were considered by 35 percent of have no plans to launch a fund in 2014. private equity rms as the target market for new funds. is decline in the past two years may be attributable to ongoing uncertainty in the European and US markets. Regional investors and high In your opinion, what are the main reasons to get LPs to commit to a fund? net worth individuals are expected to contribute the vast majority of capital.
Reasons To Get LPs To Commit To A Fund In your opinion, what will be the holding period of PE investments?
Management Fees Fund manager’s Holding Period of Investments 2% sector focus 50% Fund expected 9% Returns Fund manager’s 30% investment strategy 10% 32%
18% Transparency 15% Fund manager track record 34% 0%
≤ 2 years 3 years 4 years > 4 years irty-four percent of the respondents believe that a fund manager’s track record is the key reason behind getting LPs to commit to a fund, with expected returns being the second most popular motivation. ose funds that have been in the region for a period e majority of respondents (82 percent) believe that funds will hold investments for at least four of time and can demonstrate a proven track record of deal execution and exits are likely to years. While traditionally private equity rms have had a three to four year investment horizon, be in a strong position to attract capital. there is an increasing willingness to hold assets for a longer period.
48 49 What are the most important bene ts that PE brings to its investee companies? What will be the most attractive exit routes during 2014? Most Attractive Exit Route - 2014 What Are e Most Important Bene ts at e PE Brings To Its Investee Companies?
Trade sale (to other companies) 63% Strategic planning 41% Initial Public O ering 23% Financial advise and support 22% Financial Sales (to other funds) 9% Operational advice and support 18% Private placements 5% Business development 14%
Restructuring 5% In line with last year’s survey, trade sales continue to be the most attractive exit strategy amongst Consistent with last year’s survey, PE rms see strategic planning as the most important role to fund managers while nancial sales and private placements are considered less attractive or provide to portfolio companies, followed by nancial and operational advice and support. more di cult to execute.
What will be your target IRR in 2014? How many exit deals do you expect in 2014?
Target IRRs In 2014 How Many Exit Deals Do You Expect In 2014?
4% 9% 59%
64% 20-29% 23% 15-19% 30-39% 10-14%
18% 18%
5%
Despite the challenges in the global economy, the majority (73 percent) of fund managers None Less than 5 5 to 10 More than 10 still target an IRR greater than 20 percent. is is in line with responses received during the last two years (74 percent from the 2012 survey). e majority of respondents (59 percent) believe that there will be fewer than ve exit deals in 2014.
50 51 Will valuations in 2014 be lower than in 2013? In what sectors will you be investing in 2014?
Valuations in 2013 Were High In 2014, Valuations Will Be Lower an In 2013 Sectors Of Interest
Healthcare 23% Agree N/A 4% N/A FMOG/retail 16% 18% 23% Education 14% Services 11% Energy/utility 10% Disagree 14% Banking/ nancial services 8% Agree Infrastructure 6% 68% Real estate/construction 4% Disagree 73% Telecommunication and allied services 4% Transport 3% Other 1% 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. is represents more favorable exit opportunities for investment in the region. In line with 2012’s survey results, private equity rms continue to be cautious and will focus on Regions of interest 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
GCC 22% Egypt 17% How Is e Political Shakeout Impacting Your Investment Jordan 14% Decisions In Countries With Unrest? Lebanon 14% North Africa 12% Turkey 9% Delaying investments 67% Syria 6% Europe 3% US 1% Maintain current transactions but with better terms 23% Rest of Asia 1% Considering 2012 a proper year to bene t from South-east Asia 1% uncertainties and increase investments by 5% selectively targeting companies with attractive valuations Despite the impact of the economic challenges and recent political uncertainty, the GCC region and Egypt continue to be the focus of private equity rms in the region. is is primarily because Canceling current transaction pipelines 5% of the region’s large and growing population, growing middle class, increase in per capita income, continuing demand for infrastructure, and high government spending budgets.
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 a ected the investment climate? Appendix How do you think the political uncertainly in some parts of the MENA region has a ected the investment climate? 9 9.1 About e MENA Private Equity Association International LPs will invest less in region 36%
Attract more international LPs to Speci c areas of the region 23% Regional PE rms will focus on East and West Africa, Turkey and very few 18% countries in the MENA International investments will decrease 9% e MENA Private Equity Association is a non-pro t entity committed to supporting and tremendously due to crisis developing the private equity and venture capital industries in the Middle East and North International PE rms will want to Africa. 9% create funds speci c for the region
International PE rms will look to invest e Association aims to foster greater communication within the region’s private 5% outside the MENA region 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 Over one-third of respondents believe that the political uncertainty in some parts of the MENA stakeholders and build trust with investors, regulators, and the public regionally and region will dissuade international LPs from investing in the region, or if they do invest then they internationally. will be likely to show caution by investing smaller amounts. Our mandate: Is the current political uncertainty a ecting your investment decisions in terms of sector focus? Enhance transparency through industry statistics and information sharing O er a platform for collective knowledge sharing from top practitioners to develop best Is e Current Political Uncertainly A ecting Your Investment practice guidelines in various industries. Decisions In Terms Of Sector Focus? Leverage the expertise of leading lawyers and consultants to maintain an open dialogue with regional regulators. Bring together members and experts from di erent industries to participate in member-only, agship roundtable events to help members identify investment opportunities and build new contacts.
No Yes 45% 55% We help the private equity and venture capital communities through the following speci c initiatives:
Issue the Annual Private Equity & Venture Capital reports. Reach out to family oces 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 GP’s and industry professionals, as well as operators in education, healthcare, retail, oil and gas, information technology, consumer goods, food and beverage, nancial Just over half of respondents (55 percent) indicated that the current political uncertainty in the services, among others, to help identify investment opportunities. MENA region is having an e ect on their investment decisions in terms of sector focus. Issue white papers summarizing the roundtable discussions. Partner with relevant associations in Europe, North America, and Asia to o er 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 [email protected] www.abraaj.com
Al Masah Capital Dubai, UAE Abu Dhabi, UAE Kuwait Singapore +971 4 453 1500 [email protected] www.almasahcapital.com
Amwal AlKhaleej Riyadh (HQ), KSA, +966 11 216 4666, [email protected] Dubai, UAE, +971 4 327 5875, [email protected] Cairo, Egypt, +202 2736 3742, [email protected] www.amwalalkhaleej.com
Capital Trust Group The Euromena Funds Beirut, Lebanon UK USA +961 1 368968 [email protected] www.capitaltrustltd.com
Cedar Bridge Partners Dubai, UAE [email protected] www.cedar-bridge.com
Dubai Silicon Oasis Authority Headquarters Building PO Box 6009 Dubai, UAE +971 4 501 5374 [email protected] www.dso.ae
56 57 EFG Hermes Private Equity Masdar Capital Egypt Masdar City Tel: +20 (0) 2 3535 6499 Presidential Flight Fax: +20 (0) 2 3537 0942 Khalifa City A Building No. B129, Phase 3, Smart Village Abu Dhabi, UAE Km 28 Cairo Alexandria Desert Road P.O. Box 54115 6 October 12577, Egypt +971 2 653 3333 [email protected] UAE www.masdar.ae Tel: +971 (0) 4 363 4000 Fax: +971 (0) 4 362 1170 PineBridge Investments Middle East B.S.C (c) Level 6, The Gate, West Wing, DIFC GBCORP Tower, 13th floor Dubai, UAE Bahrain Financial Harbour District [email protected] PO Box 58 www.efg-hermes.com Manama, Bahrain +97317111888 Eversheds www.pinebridge.com Global Offices: Abu Dhabi, Amman, Baghdad Doha, Dubai, Erbil, Riyadh (in association with Dhabaan & Partners) Qatar First Bank +962 6566 0511 Suhaim Bin Hamad Street [email protected] PO Box 28028 www.eversheds.com Doha, Qatar +974 4 483333 Gulf Capital [email protected] Al Sila Tower, 25th Floor www.qfib.com.qa Sowwah Square Al Maryah Island ReAya Holding PO Box 27522 Suite 3007, 3rd floor Abu Dhabi, UAE Kheriji Plaza, Madinah Road +971 2 671 6060 PO Box 127232, Jeddah 21352 [email protected] Jeddah, KSA www.gulfcapital.com +966 2 6676777 +966 2 6656333 International Finance Corporation (IFC) [email protected] 2121 Pennsylvania Avenue, NW www.reayaholding.com Washington, DC, 20433, USA +1 202 473 3800 SEDCO www.ifc.org South Tower of the Red Sea Mall, Murjan District King Abdulaziz (Malik) Road King & Wood Mallesons SJ Berwin PO Box 4384 31 global locations, including: China, Hong Kong, Australia, the United Kingdom, Jeddah 21491, KSA continental Europe, the Middle East, Japan, and the United States. +966 2 215 1500 [email protected] [email protected] www.kwm.com www.sedco.com
Malaz Capital Suite 510, Al Akaria III, Olaya Street Riyadh, KSA +966 1 4601644 [email protected] www.malazcapital.com
58 59 TVM Capital Healthcare Partners Berytech DIFC Gate Village, Building 4 BMCE Capital PO Box 113355 BMG Financial Group Dubai, UAE BNP Paribas Global Offices: Germany, USA Brookstone Partners Morocco [email protected] Cairo Financial Holding www.tvm-capital.ae Capital Invest Capital Management House Waha Capital Capital Trust Etihad Towers, Tower 3, Level 42 & 43 Capivest Investment Bank PO Box 28922 Capsa Capital Partners Abu Dhabi, UAE Carlyle Mena Investment Advisors Limited +971 2 667 7343 Catalyst Investment Management Company [email protected] CDG Capital www.wahacapital.ae Cedar Bridge CERT Capital CFG Capital 8.3 Private Equity and Venture Capital Firms in MENA Citadel Capital Concord International Investments (Excluding real estate and infrastructure funds.) CORECAP Corporate Finance House Abraaj Group Creative Edge Technology Abu Dhabi Capital Management Daman Investments Abu Dhabi Investment Company Delta Partners Abu Dhabi Investment House Deutshe Bank Accelerator Management Company GroFin Advisory Accelerator Technology Holdings DP World Al Ahly for Development and Investment Dubai Islamic Bank Al Imtiaz Investment Company Eastgate Capital Group Al Mal Capital Eco-Syria Company Limited Al Mal Méditerranée Invest ECP Investments Al Masah Capital Limited Education Capital Alternative Capital Partners EFG Hermes Syria Amen Invest EFG-Hermes Private Equity Amwal AlKhaleej Commercial Investment Company Emerging Markets Partnership (Bahrain) Arab Business Angel Network Entreprises Partners Arabian Gulf Capital Management LLC Estithmaar Ventures (GP) Limited Arbah Capital Eversheds Ascent Group EVI Capital Partners Athar Al Majd Holdings (Dissolved) Evolvence Capital ATLAMED Corporate Investment Fidelium Finance Atlas Investment Group FINACorp Attijariwafa Bank Firogest Azur Partners Fortune Management Bank Alkhair Foursan Group Beltone Agriculture Management Fortis – Fransabank Beltone Private Equity Future Generation Reserve
60 61 Global Capital Management Limited Private Equity Initiatives Gulf Capital Qatar Capital Partners Havenvest Private Equity Middle East Limited RAIS (Netherlands) HBG Holdings Rasmala Holdings Limited IdeaVelopers Régional Gestion Ikdam Gestion Riva y Garcia Financial Group Intel Capital Riyada Enterprise Development Interactive Ventures Holdings Sadara Ventures Invest AD Saffar Capital Investcorp Bank SAGES Capital Itqan Capital Samena Capital Iris Capital Saudi Company for Technological Development and Investment IT Ventures/Nile Capital Sawari Ventures Ithmar Capital Sherpa Finance Club Jadwa Investment SHUAA Partners Limited Jasmine Advisers Sinbad Ventures GrowthGate Capital Corporation Siparex Group KGL Investment Company Siraj Capital Dubai Limited KIPCO Asset Management Company Siraj Fund Management Company Kuwait Finance and Investment Company Société Tunisienne d'Investissement à Capital Risque Kuwait Finance House Bahrain Sphinx Private Equity Management Kuwait Financial Centre Swicorp Kuwait Projects Company (Holding) The Financial Corporation Company Lebanon Invest Asset management SAL The GCC Energy Fund Managers Limited Levant Investment Management Limited The National Investor Malaz Group TIMAR Ventures General Partner Limited Marshall Fund Capital Advisors Tuareg Capital Masdar Capital Tuninvest Finance Group Maxula Gestion Tunisie Valeurs MENA Advisors Limited TVM Capital Healthcare Partners MENA Infrastructure United Gulf Financial Services - North Africa MerchantBridge & Co. Upline Investments Middle East Broadcasting Corporation Venture Capital Bank Middle East Venture Partners Viveris Istithmar Millennium Private Equity Vodafone Egypt Telecommunications Company S.A.E. Minah Partners Waha Capital MITC Capital Wamda Capital National Bank of Abu Dhabi Y+ Ventures 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) 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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