Research Reports

Private Equity in GCC

August 03 , 2016

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Executive Summary

What is this report about?

In the GCC, private equity is still at a nascent stage, but had witnessed significant growth between 2002 and 2008, before the onset of global financial crisis stalled growth of the industry. Fundraising had become anemic, despite the sizeable amount of dry powder accumulated over the boom years, and deals had stalled as acquisition finance became expensive and difficult to obtain. After a long hibernation period the industry witnessed a quantum leap in the recent years, however the GCC region is also characterized by the nascent legal and regulatory framework, with stringent foreign ownership restrictions, weak bankruptcy laws and high set-up costs, which dampen investor enthusiasm. The recent entry of UAE and Qatar into the MSCI Emerging Markets index has led to many market reforms across the region, especially in Saudi Arabia, aimed at improving disclosures and standardizing corporate governance, in an attempt to attract funding. The report analyzes the PE industry in the GCC, the sectors of focus, and the future outlook for investors.

Who will benefit and why?

The report will help family offices, policy makers, PE funds and SMEs to understand the trends in GCC PE. Emergence of PE would be a boon to start-ups and SMEs, which find it hard to obtain funding from banks due to stringent collateral requirements. With nearly 80 per cent of companies in the GCC falling in the SME space, PE can emerge as an alternate to bank financing, in the region.

How exhaustive is this report?

We have analyzed the major private equity players in the GCC, and studied sector-wise investments and changes that have occurred over time. The report highlights the impact of the regulatory regime on the growth of the industry, and elaborates on why the outlook is positive for private equity in the region. Finally, the report also outlines the various deals that have occurred, especially in the recent past, and how SMEs and start-ups could benefit from the emergence of private equity.


Key Questions Addressed

  • What is the size of Private Equity sector in GCC region?
  • Which countries and sectors have been active in deal making space?
  • How could family offices and SMEs benefit from Private Equity?

Table of Contents

  • Executive Summary
  • GCC Private Equity: Opportunities Abound
  • Private Equity Remains Small in Size
  • Multiple Options for Fund Structuring
  • Investment opportunities across sectors
  • Legal framework underpin deal structures
  • Regulatory hurdles stifle growth
  • Challenges Loom Large
  • Private Equity and Kuwait's Family Businesses
  • Private Equity and Kuwait SME Development
  • Reviving IPOs in Kuwait
  • Major Players
  • Appendix

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