UAE ranks first terms of private equity investment in 2014

UAE and Saudi Arabia have attracted over 75 per cent of MENA investment activity by value in 2014 reflecting their scale and stability and increased availability of larger target assets in the 9th annual report of the MENA Private Equity Association, a non-profit organisation supporting the development of the private equity and venture capital industry in the Middle East and North Africa.

Titled "MENA Private Equity & Venture Capital", the report says 2014 was a significant year for the industry and has demonstrated the highest levels since 2008 in investment values and fund raisings. 2014 has also seen growth in investment and divestment volumes compared to 2013.

The year was characterised by some of the largest private equity deals seen in the region. Fund managers had demonstrable success in assembling and working with consortium partners, including international private equity investors, to close major transactions. Overall, there was a sense of returning confidence and increased opportunities as the region continued to emerge from the impact of the Arab Spring.

The value of investments in Egypt doubled over those seen in 2013 as a growing middle class and movement towards increased political stability remain key factors in attracting private equity investment.

Information technology businesses saw the largest number of transactions as venture capital investors continued to target the sector. The manufacturing sector has become more attractive post the downturn and investments in that sector increased significantly over 2013.

Total number of known investment volumes increased in 2014 to 72 compared to 66 in 2013. Values of disclosed investments has also seen an increase by 118 per cent to USD 1.5 billion.

Total funds raised in 2014 reached the highest level since 2008 at USD 1,229 million compared to USD 744 million in 2013. The average close size also increased to USD 103 million. In 2014, the greatest investment values were in oil and gas and demographic driven sectors such as education, services and food and beverage.

Information technology businesses saw the largest number of transactions as venture capital investors continued to target the sector. The manufacturing sector has become more attractive post the downturn and investments in that sector increased significantly over 2013.

The venture capital industry in 2014 remained broadly consistent with 2013.

Investment activity in 2014 was led by Lebanon. The country is characterised by small and medium size companies. Support from the Lebanese Central Bank has further stimulated interest in investing in start-up companies and SMEs. Jordan, the UAE and Morocco were also notably active in 2014.