Saudi Arabia, the Arab world’s biggest economy, and Egypt, the most populous, are the most attractive markets for private equity in the Middle East and North Africa (MENA), announced NBK Capital Partners.
The United Arab Emirates (UAE) is the key market for the technology sector.
The firm indicated that 2021 could be the best year for private equity investments in the MENA region as valuations are down, regional economies are bottoming out, and fewer competitors are left
Senior managing director of NBK Capital Partners, which manages $1.2 billion in assets, Yaser Moustafa, told Reuters that this has the potential to be the “golden age” of private capital investing in the region.
“The investments we make this year will yield the best returns we’ve ever had.”
He said there were fewer competitors left in the industry compared with 50 when NBK Capital Partners launched its business in 2006.
Notably, Abraaj was the largest buyout fund in the region until it collapsed in 2018 due to investor concerns about the management of its $1 billion healthcare fund.
NBK Capital Partners, backed by the National Bank of Kuwait, has returned $700 million to its investors over the last decade and has made 17 successful exits.
The firm sees opportunities in education, healthcare, food and beverage, consumer, and industrials and technology in the region.
The NBK Capital Partners team was the subject of a business case study published by the Massachusetts Institute of Technology’s Legatum Center for Development and Entrepreneurship in December 2020.
“The opportunity for private capital in the Middle East bears a resemblance to the US in the 1970s as the region is home to many family businesses that are liquidity constrained,” the study showed.
