"Signs of regional private equity revival", Moneyworks Magazine
Dec | 2009
If the voices of some of the most revered PE practitioners are any indication of what’s happening in the PE space regionally, one may summarise the current sentiment as ‘subdued’ or ‘cautious optimism’.Although the overall sentiment definitely lacks the earlier unrealistic euphoria, it does not portray the grey picture that many were anticipating.
Participants at the Super Return Middle East event, which was held in October, were somewhat divided about the future of the PE industry in the medium term,two years, although a majority felt that the worst was over and saw signs of a slow recovery. Stephen Schwarzman, CEO of Blackstone Group, was one of those who emphasised that the worst of the downturn was over.
The fledgling private equity industry in the Middle East and North Africa (MENA) has struggled during the global financial meltdown and its aftermath as fundraising has slowed, deals and exits have disappeared and GPs and LPs have re-considered the future of the asset class in the region.
In MENA, like other emerging areas, one of the biggest problems was the rapid rise of new private equity firms that were able to raise cash almost in the blink of an eye. These firms, without solid track records, made investments at the height of the market and have seen their portfolios suffer in the downturn. They are now struggling to survive with their portfolios in distress and investors suffering burnt fingers.
"The "new entrepreneurs" of the Middle East must face up to the crisis or fail", Zawya
Dec | 2009
It's telling that there hasn't been a single bad news story about any major private equity firm in the Middle East since the start of the financial crisis, except of course the news coming out of a few publicly listed investment groups such as Investcorp or high profile sovereign backed entities like Istithmar.Investcorp described the recent trading period as the most challenging since the firm was founded in 1982, yet no other privately held firm has come out with any bad news about staffing, portfolio, access to credit, fundraising or deal pipeline. Instead most industry commentators have painted a picture of ‘opportunities abound’ with falling valuations, $13 billion of dry powder and solid portfolio performance.