PRINT THIS PAGE MENA Private Equity Confidence Survey25/06/2008. Source: Deloitte.
The attractiveness of the relatively untapped potential of the MENA region, against a backdrop of strong economic growth, has led to rising levels of investment activity and an increasing volume of private equity funds targeting the region, according to this survey from Deloitte. Our inaugural MENA private equity confidence survey, for which we have canvassed the opinions of key industry decision makers who are focused upon making investments within the region, acts as a barometer of market sentiment, whilst simultaneously providing a fascinating insight into how industry players regard this dynamic market as developing.
Key Findings:
- Increasing levels of available capital and continuing macro-economic growth are seen as the key drivers stimulating rising levels of investment activity over the forthcoming 12 months. With both funds and investment opportunities increasing in size, average deal sizes are also anticipated to correspondingly rise.
- In terms of regional investments, domestic private equity ("PE") houses are anticipated to be at the forefront of this increased activity. However, with overall competition levels rising, both Sovereign Wealth Funds ("SWFs") and internationally-backed private equity houses are expected to re-evaluate their regional investment activities.
- Entry multiples are generally predicted to increase, stimulated by high levels of liquidity and the underlying strength of the region's economies.
- The reputation and expertise of the PE houses, and their ability to deliver additional value to portfolio companies, are widely identified as being the key competitive differentiators in respect of winning deals.
- Exit volumes are expected to increase as fund portfolios reach maturity, with trade sales and IPOs perceived as the most likely exit routes. Investment returns are expected to increase or to stay at current levels.
- A shortage of skilled investment professionals and legislation governing foreign ownership are regarded as being the critical challenges impacting the MENA private equity industry.
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