DOCSLIB.ORG

The Development of Venture Capital and Private Equity in GCC Countries

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Development of Venture Capital and Private Equity in GCC Countries Binhassan, Abdullah (2010) The Development of Venture Capital and Private Equity in GCC Countries. [Dissertation (University of Nottingham only)] (Unpublished) Access from the University of Nottingham repository: http://eprints.nottingham.ac.uk/23779/1/GCC_venture_Caoital_and_private_equity.pdf Copyright and reuse: The Nottingham ePrints service makes this work by researchers of the University of Nottingham available open access under the following conditions. · Copyright and all moral rights to the version of the paper presented here belong to the individual author(s) and/or other copyright owners. · To the extent reasonable and practicable the material made available in Nottingham ePrints has been checked for eligibility before being made available. · Copies of full items can be used for personal research or study, educational, or not- for-profit purposes without prior permission or charge provided that the authors, title and full bibliographic details are credited, a hyperlink and/or URL is given for the original metadata page and the content is not changed in any way. · Quotations or similar reproductions must be sufficiently acknowledged. Please see our full end user licence at: http://eprints.nottingham.ac.uk/end_user_agreement.pdf A note on versions: The version presented here may differ from the published version or from the version of record. If you wish to cite this item you are advised to consult the publisher’s version. Please see the repository url above for details on accessing the published version and note that access may require a subscription. For more information, please contact [email protected] University of Nottingham The Development of Venture Capital and Private Equity in GCC Countries by Abdullah Abdulmuhsen BinHassan 2010 A Management project presented in part consideration for the degree of MBA. i Abstract The rapid economic growth of Gulf Corporation Council (GCC) countries in the last decade, have facilitate the entry of new industries. Private equity industry is no exception, the number of firms and funds grown significantly since 2001. However, the economic recession and the under-developed local corporate governance regulations impacted the flows of international private equity investments, especially, in a region where deal flows and fundraising activities are governed via the local relationships networks, which ultimately resists the investors inflows to the region. Therefore, the study analysis the GCC markets using Wright et al (1992) conceptual framework of private equity development. Doing so will present a well-structured market analysis present the main challenges and drivers of the local market. ii Acknowledgments It is my honor to raise my appreciation to several people helped by their time ad efforts into the success of this study. I would like to acknowledge my academic supervisors, professor. Mike Wright and Dr. Louise Scholes for their helpful guidance, comments and supports throughout the project Moreover, I would like to give special thanks to Mohammed Ibrahim, Richard Clarke, Jeanette Lepper and Sharad Jain for their assistance and patience during the data gathering process. Finally, I would like to express my gratitude to my parents, family and friends for to their support and encouragements. iii INTRODUCTION .................................................................................................................. 1 PRIVATE EQUITY AND VENTURE CAPITAL: OVERVIEW AND CHALLENGES ........................... 4 2.1 The History of Private Equity in The US and Europe ............................................................................................ 4 2.1.1 The US Private Equity ..................................................................................................................................................... 5 2.1.2 The European Private Equity ...................................................................................................................................... 7 2.2 Private Equity Market Structure ................................................................................................................................ 10 2.3 Factors Affecting The Development in The US and European Markets. .................................................... 11 2.3.1 Opportunities Generation ........................................................................................................................................... 11 2.3.2 Infrastructure to Complete Deals ........................................................................................................................... 13 2.3.3 Realization of The Gains ............................................................................................................................................. 14 2.4 The Importance of Private Equity .............................................................................................................................. 15 ............................................................................................................................ 16 2.6 Sovereign Wealth Funds ................................................................................................................................................ 17 2.6.1 The SovereignIndustrys Wealth Current Funds Challenges Investment Preferences ............................................................................................ 18 2.6.2 Sovereign Wealth Funds and Private Equity Investments ........................................................................... 20 PRIVATE EQUITY IN THE EMERGING MARKETS ................................................................. 22 3.1 The History and The Importance of Emerging Markets ................................................................................... 22 3.2 Factors Influencing The Industry in The Emerging Markets ......................................................................... 24 3.2.1 Deal Origination ............................................................................................................................................................. 24 3.2.2 Infrastructure to Complete The Deals ................................................................................................................... 25 3.2.3 Realization of Gains ...................................................................................................................................................... 27 3.3 Latest Tends in Emerging Markets ............................................................................................................................ 27 METHODOLOGY ............................................................................................................... 29 4.1 The Research Approach ................................................................................................................................................. 29 4.2 Data Sources ........................................................................................................................................................................ 30 4.3 Questionnaire Design ...................................................................................................................................................... 31 4.4 Limitations ........................................................................................................................................................................... 32 OVERVIEW OF THE GCC PRIVATE EQUITY AND VENTURE CAPITAL MARKETS .................... 33 5.1 History and Background ................................................................................................................................................ 33 5.1.1 The Development of The GCC .................................................................................................................................... 34 5.1.2 The GCC Monetary Union............................................................................................................................................ 35 5.1.3 Origins of Private Equity in GCC Countries ......................................................................................................... 36 5.2 The Development of Human Capital ......................................................................................................................... 38 5.3 Current Trends.................................................................................................................................................................... 39 5.3.1 Fundraising ...................................................................................................................................................................... 40 5.3.2 Investments ...................................................................................................................................................................... 42 5.3.3 Exit ....................................................................................................................................................................................... 46 COMPARATIVE ANALYSIS: GCC VS. CEE COUNTRIES .......................................................... 49 6.1 Overview of Central & Eastern Europe Markets .................................................................................................. 51 6.2 Supply of Opportunities ................................................................................................................................................
Load more

Recommended publications
  • Urban Megaprojects-Based Approach in Urban Planning: from Isolated Objects to Shaping the City the Case of Dubai
    Université de Liège Faculty of Applied Sciences Urban Megaprojects-based Approach in Urban Planning: From Isolated Objects to Shaping the City The Case of Dubai PHD Thesis Dissertation Presented by Oula AOUN Submission Date: March 2016 Thesis Director: Jacques TELLER, Professor, Université de Liège Jury: Mario COOLS, Professor, Université de Liège Bernard DECLEVE, Professor, Université Catholique de Louvain Robert SALIBA, Professor, American University of Beirut Eric VERDEIL, Researcher, Université Paris-Est CNRS Kevin WARD, Professor, University of Manchester ii To Henry iii iv ACKNOWLEDGMENTS My acknowledgments go first to Professor Jacques Teller, for his support and guidance. I was very lucky during these years to have you as a thesis director. Your assistance was very enlightening and is greatly appreciated. Thank you for your daily comments and help, and most of all thank you for your friendship, and your support to my little family. I would like also to thank the members of my thesis committee, Dr Eric Verdeil and Professor Bernard Declève, for guiding me during these last four years. Thank you for taking so much interest in my research work, for your encouragement and valuable comments, and thank you as well for all the travel you undertook for those committee meetings. This research owes a lot to Université de Liège, and the Non-Fria grant that I was very lucky to have. Without this funding, this research work, and my trips to UAE, would not have been possible. My acknowledgments go also to Université de Liège for funding several travels giving me the chance to participate in many international seminars and conferences.
    [Show full text]
  • Quarterly Review a Publication of the Emerging Markets Private Equity Association ● Volume V, Issue 2, Q2 2009 June 2009
    Emerging Markets Private Equity Quarterly Review A Publication of the Emerging Markets Private Equity Association ● Volume V, Issue 2, Q2 2009 June 2009 Viewpoint In This Issue The first half of 2009 has been a dismal time for private equity and venture capi- tal firms worldwide, and emerging markets PE fund managers are seeing their FEATURES share of challenges. The recent upswing in the emerging markets stock indices gives hope that the impact of the financial crisis has already hit bottom in these markets, ahead of developed countries. But even if this trend holds—and it is not Plugging the Financing Gap: yet clear it will—private equity and venture capital fund managers in developing Is There a Growing Role for countries are not out of the woods yet. Mezzanine and Debt Funds? 3 Fundraising for EM PE remains very difficult, with Q1 2009 totals down 71% year-on-year, with no clear rebound in sight. LPs retain a positive outlook for new 2009 LP Survey Results: EM PE investment opportunities and expect outperformance from legacy and LPs Still Find Emerging Markets new funds relative to developed market buyouts. However, near-term financing Private Equity Attractive Despite constraints among many Western LPs will limit their ability to commit substantial Global Economic Downturn 8 funds to the asset class this year. In the midst of this crisis, the financing gap for developing market companies is Fundraising and Investment raising its head, as equity and debt availability is constrained. Fund managers and Slows in Q1 2009 11 development finance institutions are looking at innovative ways to fill the gap us- ing debt and mezzanine fund structures and vehicles, but these nascent efforts are not yet off the ground.
    [Show full text]
  • Quarterly Review a Publication of the Emerging Markets Private Equity Association ● Volume V, Issue 3, Q3 2009 October 2009
    Emerging Markets Private Equity Quarterly Review A Publication of the Emerging Markets Private Equity Association ● Volume V, Issue 3, Q3 2009 October 2009 Viewpoint In This Issue With consensus growing that we are turning the corner to recovery, now seems an appropriate time to take stock of the impact of the crisis on emerg- FEATURES ing markets private equity. The good news is that most emerging economies weathered the crisis intact, RMB Funds—The Current State and and some are in fact leading the global recovery. The not-so-good news is Way Forward: A Legal and Tax Wish emerging market fund managers’ dependence on the hardest hit Western List (Expert Commentary) 3 institutional investors has made fundraising extremely difficult. As reported in this issue, fundraising through mid-year fell 55% year over year, testament to the internal capital constraints tying the hands of even the most enthusiastic Distressed Private Equity: potential investors for the next few quarters. The 52% year over year drop in Is There an Attractive investments, by contrast, seems to be a temporary side effect of the crisis. Investment Opportunity in Fund managers who have capital were waiting for markets to stabilize and the Emerging Markets? 9 valuations to sink lower. There are already signs of a pick-up in deal activity in the second half of the year. To put the gloomy start to 2009 into perspective, it’s important to note that fundraising and investment totals for the first six Fundraising and Investment Slows months of 2009 still exceed those for all of 2004, and are on pace to match Down Through Mid-Year 16 2006 activity levels.
    [Show full text]
  • MENA Private Equity and Venture Capital Report
    MENA Private Equity and Venture Capital Report 2014 2 MENA Private Equity and Venture Capital Report 3 MENA Private Equity and Venture Capital Report Foreword With Gratitude Dear friends and colleagues, and networks, and who benefit from the The MENA Private Equity Association Media Task Force experience of investing through economic I am honoured to introduce the 9th edition We are grateful for the public relations and media cycles and periods of political volatility. Extends its sincere appreciation to Zawya for sharing campaign support from the following: of the “Private Equity & Venture Capital primary data and industry and to our knowledge in the Middle East Report”, a publication Bringing such seasoned professionals partners Deloitte for developing the report analysis. Nahed Ashour, Senior Manager Arabic Content and that has become a leading barometer of together; the MENA Private Equity Media, Capital MSL our industry and, indeed, of the region’s Association gives the industry a strong and economic development. clear collective voice, and acts as a link to similar associations around the world. In the decade since the report began, private Deloitte Sponsors equity has established a strong foothold, Compiling this report is an important part of Declan Hayes, Managing Director, Deloitte Corporate weathered a global economic crisis, and the association’s work, serving to promote Finance Limited Without the support of the following generous emerged stronger. It is clear that although greater transparency in the industry and to sponsors, this report would not have been global perceptions may be clouded by news enhance knowledge of the impact of private Sam Surrey, Director, Deloitte Corporate Finance possible.
    [Show full text]
  • Media Industry in Dubai
    An Agency of the Department of Economic Development – Government of Dubai A SMALL AND MEDIUM ENTERPRISES DEVELOPMENT PERSPECTIVE OF THE MEDIA INDUSTRY IN DUBAI The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be violation of applicable law. Dubai SME encourages the dissemination of its work and will grant permission to reproduce portions of the work promptly. All queries should be addressed to Dubai SME at [email protected] (P.O. Box 66166, Tel:+971 4361 3000, www.sme.ae ) DUBAI SME © 2010 CONTENTS 1. EXECUTIVE SUMMARY..................................................................................................................................... 3 2. INTRODUCTION TO THE REPORT ................................................................................................................. 8 INDUSTRY DESCRIPTION .................................................................................................................................................. 8 INDUSTRY STRUCTURE (KEY STAKEHOLDERS) .................................................................................................................... 10 KEY INDUSTRY DRIVERS ................................................................................................................................................ 12 3. MEDIA INDUSTRY IN DUBAI – AN OVERVIEW......................................................................................... 13 (A) GOVERNEMENT PLAN ......................................................................................................................................
    [Show full text]
  • Emaar-Sukuk-Certificate 1..264
    BASE PROSPECTUS EMAAR SUKUK LIMITED (incorporated as an exempted company in the Cayman Islands with limited liability) U.S.$2,000,000,000 Trust Certificate Issuance Programme Under the trust certificate issuance programme described in this Base Prospectus (the Programme), Emaar Sukuk Limited (in its capacity as issuer, the Issuer and, in its capacity as trustee, the Trustee), subject to compliance with all relevant laws, regulations and directives, may from time to time issue trust certificates (the Trust Certificates) in any currency agreed between the Issuer and the relevant Dealer (as defined below). Trust Certificates may only be issued in registered form. The maximum aggregate face amount of all Trust Certificates from time to time outstanding under the Programme will not exceed U.S.$2,000,000,000 (or its equivalent in other currencies calculated as described in the Programme Agreement described herein), subject to increase as described herein. The Trust Certificates may be issued on a continuing basis to one or more of the Dealers (each a Dealer and together the Dealers) specified under “General Description of the Programme” and any additional Dealer appointed under the Programme from time to time by the Issuer, which appointment may be for a specific issue or on an ongoing basis. References in this Base Prospectus to the relevant Dealer shall, in the case of an issue of Trust Certificates being (or intended to be) subscribed by more than one Dealer, be to all Dealers agreeing to subscribe such Trust Certificates. The Trust Certificates will be limited recourse obligations of the Issuer. An investment in Trust Certificates issued under the Programme involves certain risks.
    [Show full text]
  • Sustainable Investment in India 2009
    IFC Sustainable Investment Country Reports: Sustainable Investment in India 2009 Final Report May 2009 www.terieurope.org IFC Sustainable Investment Country Reports: Sustainable Investment in India 2009 FINAL REPORT MAY 2009 Prepared for International Finance Corporation (IFC) A Member of the World Bank Group www.ifc.org IFC Task Manager Brunno Maradei, Program Officer, Environment & Social Development Department Prepared by TERI-Europe www.terieurope.org Written and edited by Ritu Kumar and Dan Siddy Copyright © 2009 International Finance Corporation 2121 Pennsylvania Avenue, NW Washington, DC 20433 All rights reserved. The findings, interpretations, and conclusions expressed in this publication should not be attributed in any manner to the International Finance Corporation, to its affiliated organizations, or to members of its board of Executive Directors or the countries they represent. Neither the International Finance Corporation nor TERI-Europe guarantee the data included in this publication and neither party accepts responsibility for any consequence of their use. The material in this work is protected by copyright. Copying and/or transmitting portions or all of this work may be a violation of applicable law. The International Finance Corporation encourages dissemination of its work and hereby grants permission to the user of this work to copy portions for their personal, noncommercial use, without any right to resell, redistribute, or create derivative works there from. Any other copying or use of this work requires the express
    [Show full text]
  • Download PDF (861.9
    5 Figure I.1. Dubai Inc. Ruler of Dubai Government of Dubai 100% 100% 100% 100% Dubai International Investment Dubai Holding Financial Centre Dubai World Corporation of Dubai Authority 100% 100% 100% 70% 100% 100% Dubai Holding Dubai Holding DIFC Investments Drydocks World 20% Borse Dubai Emirates Group Commercial Investment Group Operations Group 10% 80% 100% 100% 100% 100% Dubai Properties Dubai Financial Dubai Group Istithmar World Emirates Airline Group Market 100% 70% 100% 20% 56% Commercial Bank of Jumeirah Group Dubai Banking Group Nakheel Emirates NBD Dubai 30% 100% 100% 70% 12% 100% Emirates Islamic Tatweer Dubai Bank Limitless Dubai Investments Bank 100% 48% 100% 30% 48% Port and Free Zone TECOM Investments SHUAA Capital Dubai Islamic Bank Union Properties World 20% Emirates Integrated 100% 80% 43%Emirates 20% Deyaar Development Telecommunications Dubai Financial Group DP World Refreshements Company Company Company 100% 100% 57% 10% Dubai International National Bank of Dubai Maritime City Tamweel Capital Fujairah 100% 31% Economic Zones Emaar Properties World 48% Amlak Finance Source: Zawya. 6 3. Looking forward, GREs will likely continue to pose significant risks to the sovereign balance sheet and the financial system. Although little information is available on the financial situation of most GREs, with an estimated US$60 billion of debt due in 2011–12, the U.A.E. face rollover risk and would need to manage this carefully in light of continued turmoil in global markets. Moreover, with the restructuring of Dubai Inc., a significant amount of debt has been shifted to the medium term with potential bunching risks in 2014–15.
    [Show full text]
  • Spotlight August 2009
    SuperReturn Middle East 2009 3rd Annual Middle East, North Africa, Turkey and South Asia’s Private Equity and Venture Capital Summit 11th-14th October 2009, Grand Hyatt, Dubai http://www.icbi-events.com/KN2215PQEM1 Dear Spotlight Subscriber, Preqin is delighted to have arranged a special invitation and 15% discount for Spotlight readers who would like to attend SuperReturn Middle East 2009 in Dubai on October 11th-14th, 2009. SuperReturn Middle East has an entirely re-invented interactive, dynamic and networking agenda with a host of features and sessions designed to enable you to meet and exchange ideas with LPs and GPs alike – perfect for you to exploit every minute of your time at the event, and make every moment pay. Please contact the SuperReturn Middle East Forum 2009 Team directly: on +44 (0) 207 017 7200 or email [email protected], and be sure to quote the Priority code KN2215PQEM1 to secure your 15% discount. I’ll be chairing a session at the conference, and hope to have an opportunity to connect with you there. Kindest regards, Mark O’Hare Managing Director Preqin For more information contact the SuperReturn Middle East Forum 2009 Team directly: Quote Priority code: KN2215PQEM1 Call: +44 (0) 207 017 7200 Email: [email protected] Web: http://www.icbi-events.com/KN2215PQEM1 Private Equity Spotlight www.preqin.com August 2009 / Volume 5 - Issue 8 Welcome to the latest edition of Private Equity Spotlight, the monthly newsletter from Preqin, providing insights into private equity performance, investors and fundraising. Private Equity Spotlight combines information from our online products Performance Analyst, Investor Intelligence, Fund Manager Profi les & Funds in Market.
    [Show full text]
  • University of Nottingham the Development of Venture Capital
    University of Nottingham The Development of Venture Capital and Private Equity in GCC Countries by Abdullah Abdulmuhsen BinHassan 2010 A Management project presented in part consideration for the degree of MBA. i Abstract The rapid economic growth of Gulf Corporation Council (GCC) countries in the last decade, have facilitate the entry of new industries. Private equity industry is no exception, the number of firms and funds grown significantly since 2001. However, the economic recession and the under-developed local corporate governance regulations impacted the flows of international private equity investments, especially, in a region where deal flows and fundraising activities are governed via the local relationships networks, which ultimately resists the investors inflows to the region. Therefore, the study analysis the GCC markets using Wright et al (1992) conceptual framework of private equity development. Doing so will present a well-structured market analysis present the main challenges and drivers of the local market. ii Acknowledgments It is my honor to raise my appreciation to several people helped by their time ad efforts into the success of this study. I would like to acknowledge my academic supervisors, professor. Mike Wright and Dr. Louise Scholes for their helpful guidance, comments and supports throughout the project Moreover, I would like to give special thanks to Mohammed Ibrahim, Richard Clarke, Jeanette Lepper and Sharad Jain for their assistance and patience during the data gathering process. Finally, I would like to express my gratitude to my parents, family and friends for to their support and encouragements. iii INTRODUCTION .................................................................................................................. 1 PRIVATE EQUITY AND VENTURE CAPITAL: OVERVIEW AND CHALLENGES ..........................
    [Show full text]
  • S Emaar Annual Report4.Indd
    2014 ANNUAL REPORT A New High Letter to Shareholders 03 Business Review 06 Economic Impact & Civic Pride 08 Financial Highlights 09 Contents Property Business 10 Project Highlights: United Arab Emirates 11 Joint Venture Projects 12 Hospitality & Leisure 13 Shopping Malls & Retail 15 Emaar Retail 16 International Operations 17 Board of Directors 19 Principal Officers 23 Group Structure 24 2014 Annual Report I 1 Letter to Shareholders Mohamed Alabbar Chairman, Emaar Properties The high-point in our growth story last year was the successful IPO of our malls business. through a book-building process, the first-of-its-kind undertaken by a company in the UAE. The record-breaking IPO, with total orders of over AED 172 billion (US$ 46.8 billion), underscored the tremendous international institutional and retail investor confidence in Emaar. And as we promised to our shareholders, we added the proceeds of the IPO to the total dividend that we distributed last year, an impressive AED 17.12 billion (US$ 4.66 billion). This is a record in dividends issued by a Public Joint Stock Company in the region, a strong testament to our continued commitment to you, our shareholders. An 18-year-young company, we have consistently focused on staying agile, alert, sharp and flexible. When we commenced our journey in 1997, our motto was ‘shaping the future.’ Today, we are an integral part of the future that we envisaged for our city, led by dynamic vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, UAE Vice President and Prime Minister and Ruler of Dubai. As His Highness reminds us, to be successful “one does not put off today’s work for tomorrow but On behalf of the Board of Directors, I thank you for your support in starts tomorrow’s work today.” To Our defining 2014 as an extraordinary year for Emaar Properties.
    [Show full text]
  • Professional Directors Year 2011
    PROFESSIONAL DIRECTORS 6 stepsProfessional - Accreditation Directors Year 2021 Dr. Shaun Vorster (D.Phil., MBA cum laude) is a UAE-based strategist and adviser with a track record of 30 years in the private sector, government and academia. He resides in the UAE since 2015. Shaun originally cut his teeth as strategy practitioner navigating complex stakeholder environments in government during South Africa's first 20 years of democracy (post-1994). He served as Special Adviser to the national tourism and environment ministers in South Africa for 11 years (2004–2015), with a focus on strategy oversight, state-owned entity governance, regulatory reform, multilateral negotiations, and stakeholder management. Shaun is currently Chief Development Officer at Aurora50, a UAE-based social enterprise led by Sheikha Shamma bint Sultan bin Khalifa Al Nahyan. Aurora50 implements innovative solutions to advance diversity and inclusion at corporate board level. Dr. Shaun Vorster Shaun also serves on the advisory boards of the World Tourism Forum Lucerne (WTFL) and the World Tourism Association for Culture & Heritage (WTACH). He is a member of the executive committees of the South African Business Council (SABCO) in the UAE and the University of Stellenbosch Business School (USB) Alumni Association. As extraordinary professor at USB, Shaun lectures strategic management on the MBA programme. He is a widely published author on corporate governance, integrated sustainability reporting, scenario studies, sustainable tourism, low-carbon aviation, and climate change policy. As Vice President and Special Adviser at Expo 2020 Dubai (2015–2020), he was part of the core team that introduced the strategic planning and reporting framework across the multi-billion-dollar World Expo in 2015–2016.
    [Show full text]