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Transcript of 2011 Mena Annual Reportv1
2011MENA PRIVATE EQUITY ASSOCIATIONPRIVATE EQUITY & VENTURE CAPITAL
IN THE MIDDLE EASTANNUAL REPORT
June 2012
2
REPORT STEERING COMMITEE • AhmedEmara,ReAyaHolding
• AnthonyHobeika,GulfCapital
• AliArab,Zawya
• AzizMoolji,AbraajCapital
• ImadGhandour,CedarBridgePartners
• KarimBenSalah,Swicorp
• SamerKhalidi,NBKCapital
• SamerSarraf,AmwalAlKhaleej
SPECIALTHANKSSpecialthankstooursponsorsandallthosewhohelpeddeveloptheReport.
REPORT SPONSORS • AbraajCapital
• AfricInvest-TunInvest
• NBKCapital
• QatarFirstInvestmentBank
• Swicorp
KPMGDaleGregory,BradWhittfield,JawadShafiqueandZuhaibKhan
ZawyaAliArab,HussamMuhieddineandLaraGhibril
AMIC(MoroccanVentureCapital&PrivateEquityAssociation):
FrancoiseGiraudon,OmarChikhaoui,StephanieBillardandWilliamFellows
CapitalMSLNahedAshour
Wewouldalsoliketothankallthesurveyparticipants.
3
TABLEOFCONTENTS
01. IMPORTANT NOTICE 05
1.1 BASIS OF PREPARATION
1.2 MOROCCO DATA
1.3 DEFINITIONS & ASSUMPTIONS
1.4 DATA FILTERING
02. INTRODUCTORY MESSAGES 09
THOUGHTLEADERSHIP:MENAMACROFUNDAMENTALSIN
THEAFTERMATHOFTHEARABSPRING
2.1 MENA PEA INTRODUCTORY MESSAGE
2.2 KPMG INTRODUCTORY MESSAGE
03. PRIVATE EQUITY IN THE MENA REGION 18
3.1 SUMMARY
3.2 FUNDS
3.2.1 FUNDS RAISED TO DATE
THOUGHTLEADERSHIP:THESHAKEOUTISTHENUMBERS
3.3 INVESTMENTS
3.3.1 INFORMATION LIMITATIONS
3.3.2 INVESTMENTS MADE TO DATE
3.4 REGIONAL FOCUS
THOUGHTLEADERSHIP:REALITIESOFINVESTINGINKSA:
OPPORTUNITIESANDDIFFICULTIES
3.5 SECTOR FOCUS
THOUGHTLEADERSHIP:HEALTHCARESECTOR-
OPERATINGCHALLENGESINAFAVORABLEMACROENVIRONMENT
THOUGHTLEADERSHIP:INVESTINGINEDUCATION-
LESSONSLEARNEDFROMTHEFIRSTROUND
3.6 EXITS
THOUGHTLEADERSHIP:PRIVATEEQUITY&THEARABSPRING
4
TABLEOFCONTENTS
04. SURVEY OF GPS OF THE MENA REGION 39
4.1 INTRODUCTION
4.2 SURVEY RESULTS
4.2.1 RESPONDENT PROFILE
4.2.2 OUTLOOK
4.2.3 REGIONS AND SECTORS OF INTEREST
4.2.4 THE IMPACT OF THE FINANCIAL AND POLITICAL CRISIS
05. ABOUT THE MENA PRIVATE EQUITY ASSOCIATION & AMIC 56
06. SPONSOR PROFILE 59
07. MEMBERS DIRECTORY 66
08. PRIVATE EQUITY & VENTURE CAPITAL FIRMS IN MENA 70
5
1 IMPORTANTNOTICE
ANNUALREPORT
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1 IMPORTANTNOTICE1.1 BASIS OF PREPARATION
ThisreporthasbeenpreparedbasedondataprovidedbytheMENAPrivateEquityAssociation,andsourced
fromtheZawyaPrivateEquityMonitor.
Historicaldatahasbeenupdatedfromthatusedinthe2010AnnualReporttoreflectincreaseddisclosureof
informationinthemarket.KPMGmemberfirmshavenotinitiatedanyprimaryresearchinrelationtothis
draftreportandhavenotsought toestablishorconfirmthereliabilityof thedataprovidedbytheMENA
PrivateEquityAssociationandZawya.
The information containedherein is of ageneralnature and isnot intended to address the circumstances
of anyparticular individualor entity.Althoughweendeavor toprovideaccurate and timely information,
therecanbenoguaranteethatsuchinformationisorwillcontinuetobeaccurate.Nooneshouldactonsuch
informationwithoutappropriateprofessionaladviceafterathoroughexaminationoftheparticularsituation.
Inanalysinganddeterminingtheparametersofavailabledata,ithasbeennecessarytoapplycertaincriteria,
themostsignificantofwhichareasfollows:
•PrivateequityhasbeendefinedtoincludehousesthathaveaGeneralPartner/LimitedPartnerstructure,
investmentcompaniesandquasi-governmentalentities thatarerunby,andoperate in thesamewayas,a
privateequityhouse.
•Venturecapitalforthepurposeofthisreportisdefinedasafundspecificallydedicatedtoventurecapital
investments.ThisincludesfundsbyVentureCapitalFirms,andVentureFundsunderPrivateEquityFirms.
•FundsmanagedfromMENAbutwhosefocusistoinvestsolelyoutsidetheregionareexcludedfromthe
fundraisingandinvestmenttotals.
•MENAincludesAlgeria,Bahrain,Egypt,Iraq,Jordan,Kuwait,Lebanon,Libya,Morocco,Oman,Palestine,
Qatar,SaudiArabia,Sudan,Syria,Tunisia,UAE,andYemen.
•Investmentsizerepresentsthetotalinvestment(boththedebtandequityportions).Howeverfundsizeonly
considersequityinvested,aswehavenovisibilityondebtexposurebyfunds.
•Thefundraisingtotalsaretheamountsclosed/committedforfundraisingfunds,closedfunds,investing
funds,fullyvestedfundsandliquidatedfunds.
•Exitshavebeendefinedtoincludepartialexits,althoughsimpledilutionshavenotbeenincluded.
IMPORTANTNOTICE
ANNUALREPORT
7
WehaveworkedwithAMIC,theMoroccanVentureCapital&PrivateEquityAssociationonPE/VCdatafor
Morocco.However,giventimeconstraintsanddifferencesincollectionformat,wewerenotabletoupdateall
chartsforthe2011AnnualReport.Weareworkingtowardunifyingthedatafornextyear’sreport.Fordetailed
informationon theMoroccanPE/VCindustry, refer to the2011AMICPrivateEquityReport,availableat:
http://issuu.com/amicdocumentation
For analyticalpurposes,wehave considered the following typesof funds, asdefinedbyZawya’sPrivate
Equitymonitor:
•Announced:Officiallaunchoffundswhichareyettocommencefundraising.
•Rumoured:Fundsexpectedtoannouncetheirintentiontocommencefundraising.
•Fundraising:Fundswhichhavebeenannouncedandareintheprocessofraisingcapital.
•Investing:Fundswhichhaveclosedandareactivelyseekingand/ormakinginvestments.
•Fullyinvested:Fundsthathaveinvestedallcapitalraised.Someoftheinvestmentsmayhavedivestedin
thisstagebutnotall.
•Liquidation:Fundswhichhavedivestedallinvestmentsandhavefulfilledallobligationstoshareholders.
TheprimarydatasourcedfromZawyahasbeenfilteredaccordingtothedefinitionsusedintheEmerging
MarketsPrivateEquityAssociation(EMPEA)researchmethodology.Inparticularwehaveusedthefollowing
definitions:
FundSize:Inthecaseoffundsyettomakeafirstclose,orwherenocloseinformationisavailable,fundsizeis
equivalenttothetargetamount,andisnotedassuch.Forfundsachievingatleastoneofficialclose,fundsize
isreportedasthecapitalraisedtodate,whileforfundsthathavemadeafinalclose,thefundsizeisthetotal
capitalraised.AllamountsarereportedinUSDmillions.Rumouredfundsareexcluded.
Currency:WherefundsdatahasbeenprovidedinacurrencyotherthanUSD,exchangeratesappliedarefrom
thelastdayofthemonthinwhicheachcloseisreported,e.g.firstclosereportedin€on15April2011would
becalculatedusingtheexchangeratefor30April2011,takenfrompubliclyavailablesources.
1.2 MOROCCO DATA
IMPORTANTNOTICE
1.3 DEFINITIONS AND ASSUMPTIONS
1.4 DATA FILTERING
ANNUALREPORT
8
Fundsoffundsorsecondariesareexcluded.
Region: Statistics are based on the ‘market’ approach and funds are categorised based on the intended
destination for investments (asdefined in a fund’s announcedmandate) as opposed towhere theprivate
equityfirmislocated.
Withregardtomulti-regionfunds,wehaveincludedthesetotheextentthatthereisafocusontheMENA
region.EMPEAmethodologyincludesonlythosemulti-regionfundswhoseprimaryintentionistoinvestin
emergingmarkets.However,thesourcedatadoesnotprovidevisibilityonprimarygeographicintention.
Fundsestablishedwithaspecificmandatetoinvestinrealestateareexcludedfromthefundraising,investment
andexittotals.Theremainingrealestateinvestmentsrelatetofundswithmixedinvestmentmandates.
Conventional infrastructure funds, or funds investing directly in greenfield infrastructure projects (e.g.
bridges,roadsetc.)areexcludedfromfundraisingtotals.However,fundsthatmakeprivateequityinvestments
(determinedbasedontargetreturns)incompaniesoperatingintheinfrastructuresectorareincluded.
EMPEAdoesnottrackorreportotheralternativeassetclasses,includinghedgefunds,realestatefundsand
conventionalinfrastructurefunds.Inouranalysiswehaveexcludeddatafrominvestment-typecompanies,
realestatefirmsandSovereignWealthFunds.
IMPORTANTNOTICE
9
2 INTRODUCTORYMESSAGES
ANNUALREPORT
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2 MENA Private Equity Association: Introductory Message
The conclusions of this report are surprisingly positive given the backdrop of theArab Spring and the
subsequentturnofeventsintheregion.Onewouldhaveexpectedthatinvestorsandfundswouldhaveshied
awayduring2011giventheoverhangofpoliticaluncertainty–buttothecontrary,thevolumeofinvestments
anddivestmentsintheMENAregionincreasedrelativeto2010.
Thispositivemomentumwithintheprivateequitylandscapeisnotsurprisingforthosewhoareintimately
familiarwith the business activity in the region. FromMorocco to theArabianGulf, there are numerous
pocketsofgrowththatprivateequityplayersarepartakingofbothtodeploycapitalandtoreturncapitalto
theirinvestors.WhetheritisretailinDubai,healthcareinSaudiArabia,technologyindustriesinEgypt,oroil
servicesinIraq,tonameafew,thereisabroadspectrumofinvestmentopportunitiesthatareattractingboth
privateequityandstrategicinvestors.
Thecloudedmacroenvironmentmayhaveaffectedtheappetiteofinvestinginregionalprivateequityfunds.
Butpoliticalrisksintheregionmayhavethesamedetrimentaleffectonequityvaluelikeregulatoryrisksin
ChinaoreconomicrisksinEurope.Privateequity–asan“alternative”assetclass-isaboutinvestingingrowth
opportunitiesthatarelesscorrelatedtothegeneralbusinessenvironment,and,insomecases,takeadvantage
of such unfavorable circumstances. Competent regional managers, like their counterparts elsewhere in
developedandgrowthmarkets,havelearnedtonavigatearoundregionalrisks,andaredemonstratingtheir
abilitytodeliverreturnstotheirinvestors.Therealizedexitsinadifficultyearlike2011clearlyunderscore
theirachievement.
Astheindustryconcretizesitsaccomplishmentsanddistillsbettermanagers,ouraimasanindustryassociation
istocommunicateandcelebrateoursuccesseswithourlimitedpartners’community,andtoemphasizethat
privateequityintheMENAregionisheretostayandprosper.
INTRODUCTORYMESSAGES
ANNUALREPORT
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KPMG is pleased to continue its association with the MENA Private EquityAssociation in, once again,
producingtheannualreportontheprivateequityandventurecapitalindustriesintheMENAregion.
While2011continuedtopresentcertainchallengesforthePEindustryintheregion,itwasencouragingtosee
thetotalknownnumberoftransactionscompletedbyMENAfocusedfundsincreaseforthefirsttimeinrecent
yearsfrom70in2010to73in2011.PEfirmscontinuetobecautiousintheirinvestmentstrategiesfavouring
thenon-cyclicalanddefensivesectorswithstronglong-termfundamentals.
Total fundraisingdecreasedin2011comparedto2010,astherewasanoticeableshift intheregion’sfund
raisingfocuswith6ofthe10majorfundswhichsuccessfullyclosedduringtheyearhavingagrowthcapital
investmentfocus(anincreasefrom3 in2010). It isencouragingtoseeagreaternumberof fundsfocuson
growthcapitalinvesting,sincemostprivatecapitalinvestingopportunitiesintheregionaregrowthorientated
innature.Inaddition,tomaximiseinvestingflexibility,investorsarenowlesswillingtolimittheirinvestment
focusbysector,andprefertheflexibilitytolookforvalueacrossabroadrangeofsectors.
Whilestrongmacro-levelfundamentalscontinuetoplayastrategicroleinMENA’seconomicroadtorecovery,
theestablishmentofpoliticalandsocialstabilityremainimportantelementsfortheinvestingenvironmentin
theshorttomediumterm.Withtheongoingslowdownofmorematuremarkets,MENAislikelytoremaina
regionofopportunityandhubforprivateequityandventurecapitalactivity.
WewouldliketonotethatthisreportwouldnothavebeenpossiblewithouttheeffortsofZawya,theMENA
PrivateEquityAssociationandthemembersoftheReportingSteeringCommittee.Wearegratefultothem
forsharingprimarydataandindustryinsights,andwesupporttheeffortsoftheAssociationinfurtheringthe
interestsofPrivateEquityintheMiddleEast.
DaleGregory,Partner–TransactionServices
T:+97144030300-E:[email protected]
KPMGisaglobalnetworkofprofessionalfirmswithover145,000staffinmemberfirmsacross153countries.
KPMGintheUAEwasestablishedin1974andhasgrownto650professionalstaffledby31Partners,across8
officesinthecountry.WeworkcloselywithourcolleaguesinofficesthroughouttheMENAregionandacross
theworld.
INTRODUCTORYMESSAGES
KPMG Introductory Message
ANNUALREPORT
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Thought Leadership:
MENA Macro Fundamentals in the Aftermath of the Arab Spring:
A Large Gap of Catch-Up Growth to Bridge by a Too-Big-To-Ignore MENA Economy
Anthony Hobeika, Head of Research, Gulf Capital Pvt. JSC
Theneedformoreequitableandsustainableeconomicexpansion,alongsidesocialbenefitsforunprivileged
people,wasakeysocio-economicdriveroftherecentwaveofpoliticaltransformationinanumberofMENA
countries (suchasTunisia,Egypt,Libya,YemenandMorocco).At thesame time, thegrowingrecognition
thatthesesocialandeconomicneedscannotbeignoredhasfurthercreditedthereformprocessandstimulus
packagesinothercountries(mainlytheArabianGulf).
Forwell-entrenchedregionalprivateequity(PE)investors,theArabSpringrepresentsahistoricopportunity
togaugelong-termgrowthprospects inmanyindustriesandgeographies,notwithstandingtheshort-term
challengesofinvestinginselectedcountriesarisingfromthetransitoryaspectofthecurrentevents.Patient
andinformedPEplayerswillbeabletobenefitfromhighlyinterestingsuccessstoriesinmanyareasofthe
MENAeconomies.
THOUGHTLEADERSHIP
ANNUALREPORT
13
Specifically,withanaggregatedGDPofcircaUSD2.5trillion,theMENAregionhasbecomealarge,emerging
economiczonethatishardtoignoreonaglobalscale.Itssizeisnowcomparabletoemergingeconomiessuch
asBrazil,RussiaandIndiaofferingacompetitivedepthforsizeableinvestments.Itisalsodeliveringhealthy
andsteadygrowthineconomicactivity,supportedbyattractivefundamentals.
Theeconomicdynamicslookincreasinglyappealing,andmaybefurtherunlockedbytheongoingpolitical
THOUGHTLEADERSHIP
ANNUALREPORT
14
transitionsandreformsthroughouttheregion.AlthoughthedifferentMENAcountriesareatunevenstages
oftheirdevelopment,theaverageArabianeconomyisatthecatch-upstageofhighgrowth.Whencoupled
withitsyoung,fast-growingpopulationbyglobalstandards,theregionoffers investmentopportunities in
demographically-drivenandincome-drivennichesectors.
Consumersectorssuchasfoodandbeverage,healthcare,education,powerandwater,andretailaretypical
benefitersinsuchgrowtheconomies.PEfirmsthatareabletoidentifythekeytrendswithintheseindustries
willbebestplacedtooutperformthewidereconomy.
Specificopportunitieswilldependonwhereeachcountrystandsinthelong-termeconomiccycle.Forexample,
whileintermsofdepththeUAE,KSAandEgypthavecomparableconsumermarketsizes,thesecountriesare
atdifferentstagesoftheirmaturingprocess,whichwouldimplydifferentinvestmentstrategiesandgrowth
potential.
THOUGHTLEADERSHIP
ANNUALREPORT
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Inboththeimmediateandlonger-term,theArabianGulfcountriesappeartobemoreimmunefromeconomic
spillovereffectswhencomparedtotherestoftheregion,inparticularintheaftermathoftheregionalpolitical
disturbances.Inadditiontohavinglimitedornopoliticalunrest(barringBahrain),itisthecombinationof
severalfundamentaleconomicandpolicyfactorsthatmakestheGCCcountriesamoresustainableenvironment
foreconomicprosperity.
THOUGHTLEADERSHIP
ANNUALREPORT
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Thesefactorsincludethesub-region’slargebaseofnaturalresources,governmentcapabilityanddevotionto
supportlocaleconomies,progressivereforms,anddiversificationawayfromoil.GCCconsumersarespending
onthebackofrisingpurchasingpowerandgovernmentsareimplementinglarge-scaleinfrastructureprojects.
TheGCCregionisthusincreasinglyviewedasanattractiveinvestmentdestination,inparticularfromarisk/
rewardstandpoint.
Inthelongerrun,otherMENAcountriesarealsostrongcandidatesforattractinginvestment,asanumberof
theseeconomiesaregrowingfromanexceptionallylowbasewhencomparedtoglobalandemergingmarkets.
Manyhavesufficientlylargeandfast-growingyoungpopulationsyettotapthelabormarket,thusfueling
domesticdemandandeconomicgrowth.
Inparticular,thecountrieswitnessingcurrentpoliticalchanges,suchasEgypt,Morocco,TunisiaandLibya,
have a historic chance to bridge the vast untapped potential for growth. However, the current political
transitions,aswellastheimplementationoflong-awaitedreformsbythenewpoliticalclass,arekeychallenges
toovercomeinthenearfuture.
THOUGHTLEADERSHIP
ANNUALREPORT
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THOUGHTLEADERSHIP
18
3 PRIVATEEQUITYINTHEMENAREGION
ANNUALREPORT
19
2011was an encouraging year for theMENAprivate equity industry.Despite challenges posed by socio-
politicalunrestinanumberofcountries,theindustrybegantoshowsignsofrecovery.Industrydatareveals
an increase in deal volumes, while a number of funds successfully raised capital, despite a challenging
fundraisingenvironmentfortheindustryglobally.
AnumberofcountriesthatexperiencedsocialunrestaspartoftheArabSpring,whichbeganwithTunisia
andEgyptin2010andspreadtoBahrain,Libya,SyriaandYemenin2011,continuetofaceheadwindsintheir
transitiontoamorestablepoliticalandsocialenvironment.However,itisanticipatedthattheArabSpringhas
thepotentialtousherinimprovedgovernance,greatertransparencyandamorestableinvestmentenvironment
whichshouldleadtotheopeningupofmarkets,which,withtheexceptionofEgypt,havetraditionallyoffered
limitedopportunitiestoprivateequityplayers.
InadditiontothistheeventsoftheArabSpringhighlightedtheneedforregionalgovernmentstoadoptand
institutebroaderreformpoliciesencompassingeducation,jobcreationthroughinvestmentininfrastructure
andentrepreneurshipandthedevelopmentofamorecompetitiveandparticipativeprivatesector.Asregional
governmentsacceleratetheirdrivetobuildsustainable,diversifiedeconomies,supportedbystrongunderlying
macroeconomicfundamentals(suchasabundanceofhydrocarbonsandfavorabledemographics)whichare
expectedtocontinuetodriveeconomicgrowthinthemediumandlongterm,reformsinstitutedwillcontinue
toincreasethescopeforinvestmentssupportingthePEindustry.
PRIVATEEQUITYINTHEMENAREGION
3 PRIVATEEQUITYINTHEMENAREGION3.1 SUMMARY
Note: While we have included a total “transaction value” in the chart above, this excludes a number of transactions for which the value is unknown (some of which are estimated to be considerably large in value terms).Source: Zawya Private Equity Monitor and AMIC.
ANNUALREPORT
20
PRIVATEEQUITYINTHEMENAREGION
Overthepastthreeyears,followingtheglobaleconomicslowdown,fundraisingintheregionhasaveraged
USD113millionper close,withUSD0.7billionbeing raised in2011,USD0.8billion lower than the total
fundsraisedin2010.Morethan10fundsweresuccessfulinraisingcapitalin2011,withanincreasedfocuson
growthcapital-focusedvehicles.
Itisalsoencouragingtoseethetotalnumberoftransactionsincreasingforthefirsttimeinrecentyears,despite
thepoliticalinstabilityintheregion.Egyptreturnedasoneoftheleadingdestinations,claiming22%ofthe
totalnumberofinvestmentsin2011(comparedtojust4%in2010).Also,continuingthetrendseenin2010,the
KingdomofSaudiArabia(KSA),TurkeyandtheUnitedArabEmirates(UAE)remainedpopulardestinations
forinvestmentin2011.
PEfirmscontinuedtoinvestcautiouslyandfavornon-cyclicalsectorssuchastransportation,healthcare,energy
andfood/agriculturewhichaccountedfornearlyathirdoftotalnumberofinvestmentsin2011.Sectorsthat
weremostsignificantlyimpactedbytheglobalfinancialcrisis,suchasrealestateandconstruction,continued
toseereducedactivity.
AsthenascentPEindustryintheregionbeginstomature,fundsarebeginningtoapproachtheendoftheir
expected life cycle and hence PE players are increasingly focusing onmanaging exits. In the immediate
aftermathoftheglobalfinancialcrisis,mostregionalprivateequityplayersincreasedtheirfocusonpreserving
andenhancingvaluewithintheirportfolios.Thisstrategyseemedtohavepaidoff,andthenumberofexitsin
2011increasedto30,relative,to7and23in2009and2010.Thistrendislikelytocontinuein2012with23%of
managersstatingthattheywillbeprimarilyfocusedonexitsduringthisyear.
Global macro-economic headwinds, driven primarily by uncertainty in Europe created a challenging
fundraisingenvironmentforthePEindustryglobally.Totalcapitalraisedreacheditslowestpointin6years
withtotalfundsraisedrepresentinga2.5%declinerelativeto2010and60.5%declinerelativeto2008*.
Theadverseglobalmacroeconomicbackdrop, combinedwith the eventsof theArabSpring, resulted ina
3.2 FUNDS
3.2.1 FUNDS RAISED TO DATE
* Source: Bain & Company Global Private Equity Report 2012, p19.
ANNUALREPORT
21
PRIVATEEQUITYINTHEMENAREGION
challengingfundraisingenvironmentinMENAin2011,withonlyUSD$0.7billionoffundsraisedduringthe
yearrelativetoUS$1.5billionin2010.
Consequently, cumulative funds under management grew to USD 23.2 billion in 2011. The continuing
Note: Due to data limitations, excludes MoroccoSource: Zawya Private Equity Monitor
Note: This graph does not reflect funds repaid to investors or management charges, both of which will reduce the cumulative funds under management. Due to data limitations, excludes Morocco.Source: Zawya Private Equity Monitor
ANNUALREPORT
22
PRIVATEEQUITYINTHEMENAREGION
lackofbankfinancingavailableandlimitedaccesstoviablecapitalmarkets intheregionhavemeantthat
companiescontinuetoviewPEasanattractivesourceofcapital.Despitethis,theregionalPEindustryremains
significantlyunderpenetratedwithcumulativefundsraisedduringthepastdecadereachingaround1%of
2011GDPascomparedtoaround11%ofGDPinmoredevelopedmarketssuchastheUS,highlightingthe
industry’sstronggrowthpotential.
TheaveragecloseperfunddecreasedfromUSD141millionin2010toUSD62millionin2011.Thefollowing
tabledetailsmajorfundsthatsuccessfullyclosedduring2011.
Ofthe8newfundsannouncedin2011,3reachedsuccessfulcloses,raisingatotalofUSD254million.This
represented74%ofthecombinedinitialtargetsize(ITS)ofthesefundsand38%ofthetotalfundsraisedin
2011.Thefivefundsthatwereannouncedin2011thatdidnotmakeafirstclosehaveatotalITSofUSD742
million.
Oman’sfirstPEfund–theFINCORPOmanPrivateEquityFund–wassuccessfullylaunchedin2011.Thefund
intendstoencourageentrepreneurshipinOmanwithafocusonindustrialmanufacturing,petrochemicals,
infrastructure,healthcare,education,tourismandhospitality.
Note: ‘Other’ relates to funds raising in Morocco. Due to data limitations, all average calculations pertaining to funding exclude Morocco.Source: Zawya Private Equity Monitor and AMIC.
1Sources: Cumulative funds raised since 2001 in MENA: USD 23.2B (Source: MENA PE association current and past reports), GDP 2011 for MENA: USD 2.5 trillion (Source: IMF April 2012), Cumulative funds raised since 2001 in U.S.: USD 1.7 trillion (EMPEA annual reports), GDP 2011 for U.S. : USD 15 trillion (Source: IMF April 2012)
ANNUALREPORT
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PRIVATEEQUITYINTHEMENAREGION
2011sawanoticeableshifttowardsgrowthcapitalfunds,with6ofthe10majorfundsraisedduringtheyear
havingagrowthcapitalinvestmentfocus.Collectively,thesegrowthcapitalfundsrepresentUSD0.5billion
or81%offundsraisedduring2011(withanITSofUSD1.1billion).
Theriseofgrowthcapitalfundsin2011isareflectionofthesortofopportunitiesfundmanagersareseeing.
Inahighgrowthregionwherereturnsarecharacterizedbyearningsgrowthasopposedtoleverage,growth
capitalfundshavebecomeincreasinglypopularduetotheperceivedgrowthprospectsyieldinghigherreturns
andbettervalue.
Note: Due to data limitations, excludes MoroccoSource: Zawya Private Equity Monitor
ANNUALREPORT
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PRIVATEEQUITYINTHEMENAREGION
Afocusonmanagingexistingportfoliosandinvestingfundspreviouslyraised,coupledwithachallenging
fundraisingenvironmenthascausedmanyfundmanagerstoreducetheirITS.Consequently,in2011,there
wasashiftawayfromfundsgreaterthanUSD1billiontowardsfundswithITSofUSD500millionorlower.
WiththeexceptionoftheAbraajREDFund(ITSofUSD650million),allofthefundsthatsuccessfullyclosed
in2011hadanITSofUSD500millionorlower.
Nearlyhalfofthetotalactivefundsarecurrentlyintheprocessofinvestingwith30%stillraisingcapital.
Note: Due to data limitations, excludes MoroccoSource: Zawya Private Equity Monitor
Note: Due to data limitations, excludes MoroccoSource: Zawya Private Equity Monitor
ANNUALREPORT
25
THOUGHTLEADERSHIP
Thought Leadership:
MENA Private Equity: The Shakeout is in the Numbers
Samer Khalidi, Director, NBK Capital
MuchhasbeensaidabouttheexpectedrationalizationoftheMENAprivateequity
industry following the global economic crisis and themany issues the region has
faced since 2008. Commentatorsmake reference to rumors of LP refusal to honor
commitments, investmentsbeingunderwaterandGPsbeingunable to raisenewfunds.Therehavebeen
visiblesignsofproblemsatsomefirmsandtheirportfoliocompanies,whichsupportthesuggestionthata
winnowingofthefieldisinprogress.However,thereisnoneedtospeculate,astheoutcomewillbeclearby
2013or2014.Whythislevelofcertainty?Itisinthenumbers.
Asshowninthisreport,75fundstargetingtheMENAregionwereraisedbetween2005and2008.Bytheend
of2013thecommitmentperiodofallofthesefundswillhaveexpired,withthebulkoftheseexpirations–59
infact–occurringby2012.Thatmeansthatanyofthemanagersthathavenotalreadyraisedmoneywillhave
toseekfundsbetween2012and2014,assumingtheyattempttheexerciseatall.Asparticipantsinwhatsome
callthepurestformofcapitalismintheworld,wewillseewhatverdictthemarketdeliversoneachandevery
memberofourcommunity.
Arelatedanalysispointstoasubstantialopportunityforthesurvivors.Fundsthatinvestedduringtheboom
willneedtostartdisposingofassetsasfundlifedeadlinesapproachandinvestorcallsforliquidityevents
increase.Alreadymany of the earlier vintage funds are bumping up to the end of their fund lives, even
accountingforextensions.
Again,lookingatthenumbers,weseethatatotalof317transactionsclosedfrom2006to2008.Overthenext
twotothreeyearstheseassetsmustcometomarketinonewayoranother.Whilethequalityandattractiveness
oftheassetsboughtduringtheboomareunclear,thereisnoquestionthattherewillbealargepoolofpotential
transactionsforthosefirmsabletotakeadvantageoftheopportunity.Inadditiontothevolumeofpotential
transactions,theconditionsareexpectedtobefavorable,asthesellerswouldbeundersignificantpressure
todisposeoftheassets.Takentogether,itwouldappearthatthesurvivorscouldenjoyasubstantialboostto
theiractivitiesoverthecomingyearsattheexpenseoftheirlesssuccessfulpeers.
ANNUALREPORT
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PRIVATEEQUITYINTHEMENAREGION
Theseremainingteamsthatalsofocusonthemiddlemarketwillalsobenefitfromtheeconomicrealitiesfacing
thissegment.Regionaleconomicactivityispickinguponthebackofdomesticandglobaleconomicrecovery.
However,manybusinessesareunabletotakeadvantageofthisimprovementastheirfinancialresourcesand
thoseoftheirownershavebeendepletedoverthepastfewyears.Normallyreluctanttolendtothissegmentat
thebestoftimes,banksareevenlesswillingtosupportthemtoday.Facedwithlimitedresourcesandnoaccess
todebt,businessownerswhowishtogrowmustraiseequityfromamuchdiminishedpoolofinstitutional
investors.NotonlyaretherefewerPEfirmstoengage,butbankshaveretreatedduetoregulatoryissuesand
largefamiliesarefocusedontheircorebusinessestoinvestactivelyelsewhere.Again,thefutureseemstooffer
anenvironmentofreasonabledealopportunitieswithdynamicsthatatleastdon’toverlyfavorsellers.
Thisbegstheobviousquestion:whowillthesesurvivorsbe?Atthispointanyanswerwouldbetheresultof
conjecturesinceperformancedataandotherindicatorsarenotavailable.Itisalsonotusefultotrytodescribe
thecharacteristicsofthepossiblesurvivors,asthiswouldbeanoverlygenericdiscussion(e.g.trackrecord,
stability).Whatisclearisthatthemarchoftimewillrevealstarklyandclearlywhoarethelastmenstanding.
Therearealsosignsthatthefutureforthismuchreducednumberofparticipantswillbeattractive.
Marketexpertsestimatebetween10%and30%ofPEinvestmentsintheregionareunannounced.Furthermore,
in some cases where investments are publicly announced, PE houses have not revealed the size of the
investment.Approximately30%oftheannouncedtransactionsinthelastdecadehavenotpubliclydisclosed
theirsize(26%in2011).
Further, in the absence of comprehensive information on the financing structures used by PE houses for
fundingtransactions,weareunabletoanalyzeandcommentonthedebt/equityfinancingstrategiesusedfor
structuringinvestments.Hence,dealsizesarereportedastotaltransactionsizeratherthanequityinvestment
bythefund.
3.3 INVESTMENTS
3.3.1 INFORMATION LIMITATIONS
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PRIVATEEQUITYINTHEMENAREGION
Despiteanumberofmacrochallengesintheregion,includingpoliticalinstability,thenumberofPEdeals
increasedslightlyfrom70to73in2011.
Fromtheinvestee’sperspective,PEinvestmentasameansoffundinggrowthcontinuestobeanattractive
methodofraisingfinanceandsecuringastrategicpartnership.Obtainingbankingfinancecontinuestobea
relativelycostlyformoffinanceforcompanies,inparticularSMEsandstart-upcompanies,whileaccessto
fundingfrommostcapitalmarketswithintheregioncontinuestobechallenging.
Forthetransactionswherereporteddataisavailable,theaveragesizeoftransactionsin2011decreasedfrom
2010.
However,itisimportanttonotethatthereweresomepotentiallysignificantinvestmentsmadeduring2011
forwhichthetransactionvaluehasnotbeenmadepublic,includingCarlyle’sacquisitionofa42%stakein
AlamarFoodsanda48%stakeinBahcesehirK-12Schools.
GPsintheregioncontinuetofundamentallybelievethatthereareattractiveinvestmentopportunitiesinthe
region.
3.3.2 INVESTMENTS MADE TO DATE
Source: Zawya Private Equity Monitor and AMIC.
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PRIVATEEQUITYINTHEMENAREGION
Moroccohoststhelargestnumberofinvestments,witha29%marketsharefrom2006,and36%in2011.When
analyzingthenumberoftransactionssince2006,wefindthatEgyptandtheUAEhaveenjoyedsimilardeal
volumes,with77and72 investments respectively.Wenote thatwhileSaudiArabiahas traditionallybeen
popular,with37investmentscompletedinthelastsixyears,onlyfivetransactionswerecompletedinthelast
twoyears.However,giventhesizeoftheeconomyinSaudiArabia(thelargesteconomyintermsofGDPin
theMiddleEast),thecountryisexpectedtobenefitfromsignificantPEinvestmentintheyearstocome.
Despitetherecentpoliticalinstability,Egyptwitnessedasignificantincreaseinthenumberoftransactionsin
2011(16transactions)ascomparedto2010(threetransactions).
TheUAEcontinuestobeapopulardestinationforfundmanagersand,giventhesizeanddynamicnatureof
theeconomy,itisunlikelythatthistrendwillchangegoingforward.
During2011,5%ofthetransactionsbyfundswhosemaingeographicalfocusistheMENAregioninvolved
targetcompaniesoutsideoftheMENAregion.ThemajorityofthesetransactionsweremadeinIndiaandthe
UnitedStates.
3.4 REGIONAL FOCUS
Source: Zawya Private Equity Monitor
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THOUGHTLEADERSHIP
Thought Leadership:
Realities of Investing in KSA: Opportunities and Difficulties
Haitham Al-Foraih, Vice President, Amwal AlKhaleej
With its immense resources, growing population and expandingmiddle class,
SaudiArabiaisincreasinglyappearingasacompellingregionalmarketforforeign
firms.EffortstoliberalizeandderegulatetheeconomyhaveearnedSaudiArabia
the11thrankinWorldBank’sEaseofDoingBusinessin2011rankingupfrom38thplacein2007.Whileat
the same time the share of thenon-oil private sectorhas seen substantial growth increasing from13%of
GDP in1970 to48% in2010.Theseeffortshave led to theKingdommore thandoubling its foreigndirect
investment(FDI)inflowbetween2005and2010(source:UnitedNation’sWorldInvestmentReport2011).The
vastpotentialcreatedbytheKingdom’sbuoyanteconomy,inadditiontobroad-rangingregulatoryreform
programs,hashelpedredefinethecountry’sbusinessenvironment.
Furthermore,withtheinstitutionofregulatorychangessuchasthemuch-anticipatedmortgagelaw,asolid
privatization pipeline and an increase in Public Private Partnerships (PPPs), many other sectors such as
healthcare,education,oilandgas,financialservices,infrastructure,andrealestatearelikelytoseeexponential
growthoverthenextfewyears.Thistrajectoryisfurthersupportedbynumerousgovernmentledinitiatives
aimedatstimulating theprivatesector’s interest indevelopingkeyunderpenetratedsectors.For instance,
the Saudi government provides qualified domestic companies with long-term interest-free financing to
developprivatehospitalsandschools.Thishastranslatedintoawealthofprimaryandsecondaryinvestment
opportunitiesinprivateeducationandhealthcare.
Furthermore, favorable demographics have also led to a surge in private consumption as theKingdom’s
populationcontinuestoexpandandpurchasingpoweramongtheyoungergenerationcontinuestorise.This
surge indisposable incomehasgeneratedagreatdeal of interest around investmentopportunities in the
Kingdom’shigh-growthretailmarket,whichhasbeenexperiencingextendedperiodsofstronggrowthand
isexpectedtoreachanestimatedUSD112billionby2015,fromUSD73.5billionin2011,accordingtoarecent
reportbyBusinessMonitorInternational.
2Figures are at 1999 constant prices (real terms, not nominal terms)
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PRIVATEEQUITYINTHEMENAREGION
WhilethereisundoubtedlymuchtobeexcitedaboutinSaudiArabia,thereremainsroomforimprovement
throughbothfasteradoptionofexistingreforms,andtheintroductionoffurthereconomicandlegalreform.
There is often a lag, and sometimes a discrepancy, between enacted reforms and their implementation in
practice. This is, however, being addressed in theKingdom,withmany government entities taking great
stridesinstreamliningtheirprocessestoenablequickadoptionofnewreforms,andmoreleadersfromwithin
theprivatesectorassignedkeypublicrolesandtaskedwithaddressingimplementationchallenges.
Smallandmedium-sizedenterprises(SMEs),akeydriverofdomesticcompetitionandjobcreation, isone
areathatshouldbeprioritizedinfuturereformagendasbypolicymakers.SMEscontinuetostruggletogain
accesstodebtfinancingatfavorableterms.Thisisprimarilyduetoacombinationofthebankingindustry’s
“name-based”andcollateralizedlendingpractice,andtheCentralBank’sconservativeloan-to-depositratio
requirements.Privateequityinvestorsarealsoimpactedbythisconservativebankingenvironment,asaccess
toacquisitionfinanceandcashflowlendingisrelativelytoughertosecurecomparedtoothermarkets
AlthoughthenarrowfundingoptionsforSMEsmakesprivateequityanattractivesourceofgrowthcapital,
many family businesses are yet reluctant to relinquish control due to pride and legacy considerations.
Furthermore,recentvaluationdisparitiesamongsellersandbuyers(relativetothepublicequitymarket)have
ledtoascarcityofwell-pricedgrowthcapitalopportunities.Finally,privateequityfundsneedtotakeinto
accounttheshareholderbaseoftheirinvestmentvehicleinordertoabidebyforeignownershiplimitationsas
wellastaximplications.
These challenges are being addressed in some form or other, with different expected timelines for their
resolution.Inthemeantime,SaudiArabiaremainsanattractivemarketwithauniqueoperatingclimate.Local
presenceandexpertiseremainsinvaluabletoasuccessfulSaudiinvestmentstrategy.
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PRIVATEEQUITYINTHEMENAREGION
The proportion of investments attributable to the technology, media and telecoms (TMT) and healthcare
sectorshasincreasedinrecentyears.TMTandhealthcarecollectivelyaccountedfor38%ofthetotaltransaction
volumein2011.ItisimportanttonotethatthemajorityofTMTtransactionswereventurecapitalinnature(12
outof14transactions),henceweresmallerintermsofinvestmentvalue.
Healthcarehasincreasedinpopularityoverthelasttwoyears,claiming9transactions.Thehealthcaresector
isvastandmadeupofmanydifferentindustries,frompharmaceuticalstohospitals.Thissectorcontinuesto
benefitnotonlyfromagrowingpopulationintheMENAregionandapercapitahealthcarespendatonly
about15%ofthatindevelopedmarkets,butalsoagrowingmiddleclasswithincreasingabilitytoinvestin
healthcareservices.Itisalsoconsideredtobeasectorrelativelyunaffectedbytheeconomicdownturn,and,in
somecountriesintheregion,hasbenefitedfromanincreasingscopeofobligatoryemployerhealthinsurance.
Retailhasalsoemergedasapopularsector,drivenbyhighgrowthandrisingconsumerdemandinmany
countries.Asexpected,thesectorsmostheavilyimpactedbytheglobalfinancialcrisissuchasconstructionand
realestatehavefallenbehind.Withinthe“others”category,thesignificantportionoftransactionscompleted
during2011isattributabletosectorssuchasconsumergoodsandeducation.
3.5 SECTOR FOCUS
Note: Due to data limitations, excludes AMIC dataSource: Zawya Private Equity Monitor
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THOUGHTLEADERSHIP
Thought Leadership:
Healthcare Sector – Operating challenges in a favorable macro environment
Amitava Ghosal, Partner, Al Masah Capital Limited and Board Member, Healthcare
Mena Limited
Ithasbeenwelldocumentedandwidelyaccepted that theMiddleEastandNorth
Africa(MENA)isanattractivemarketforhealthcareproviders.TheregionspentamassiveUSD71billion
(or4.1%ofitsGDP)onhealthcarein2010,comparedtoUSD27billionatthestartofthemillennium.Several
factors strengthen thebelief thatMENAwill continue tobeanattractivemarket forhealthcareproviders:
theregion’s increasingelderlypopulation;prevalenceofnon-communicableor“lifestyle”diseasessuchas
diabetes, cardiovascular ailments and cancer; growing aspiration for healthcare services of international
quality(anoutcomeofrisingincomeandliteracylevels);andintroductionofmandatoryhealthinsurancein
somepartsoftheregion.
However,forinvestorsandoperators,thereareissuestotackletotransformtheseopportunitiesintosuccess.
TheregulatorychangesthatareanticipatedtohappeninthenearterminsomeofthemajorlocationsinGCC
willpresentsomechallengesforhealthcareoperators.Therisingcostofhealthcareacrosstheglobeisleading
governments to increasinglyseek long-termsustainable solutions tomakehealthcaremoreaffordable.For
instance,theUS,whichspentUSD2.6trillion(or17.9%ofitsGDP)onhealthcarein2010,recentlypassedthe
healthcarereformbilltotackleburgeoninghealthcareexpenses.Thenewbillextendshealthinsurancetoall
uninsuredAmericans,providessubsidiestolow-incomeindividualsandfamiliestopurchasehealthinsurance,
andensuresthatinsurersdonotdenycoveragetothosewithpre-existingconditions.Somecountriesinthe
MENAregionarefollowingsimilarstrategiesandarelikelytoimplementtheAbuDhabimodelofcompulsory
insuranceforallresidents.Whilethiswillcontributetorisingdemandforhealthcareservices,thehealthcare
operators need to significantly enhance their systems andprocesses to allow for efficientmanagement of
theincreaseininsurance-relatedservices.Operatorsmustalsobepreparedtocomplywithnewregulations
regardingfairpricing,paymentcyclemonitoring,costefficiencyandethicalstandards.
1World Health Organization, International Monetary Fund, Al Masah Capital Research
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THOUGHTLEADERSHIP
A shortage of qualifiedmedical staff has also long been an issue in theMENA healthcare market. Staff
compensationcontinuestoriseconsiderably,especiallyforthebetterqualified.Hence,employeemanagement
andretentionisakeychallengeforhealthcareoperators,althoughtheintensityofthischallengevariesacross
markets.Thenatureofhealthcareservicesectorstaffingrequiresattentionfromtopmanagement,andshould
notbejusttheresponsibilityofahumanresourcedepartment.Incurrenttimes,staffingmaybethetopmost
priorityforhealthcareoperators,demandingthegreatestshareofmanagementattention.
Withmore competition coming especially in the large hospitals sector, availability of proper information
systems across all aspects of delivery andmanagement ofmedical care is gaining importance. There are
stillquiteanumberofmid-to-largescaleoperatorswhorelyonrudimentarysystemstoprocessallpatient
informationandarehesitanttoinvestinmoderntechnology.However,withincreasingcompetition,patients
willbedemandingfaster,moreefficientandbetterqualityserviceforwhichinvestmentinrobustITplatforms
isofstrategicimportance.
With the rapid changes happening in the medical field, one needs to be vigilant in looking for new
opportunities,aswellasrecognizingwheretechnologiesarebecomingobsolete.Forexample,onenoticeable
trendintheregionalhealthcaremarkethasbeenthegrowingshiftfromactivetreatmenttopreventivecare,
whichisopeningupahugemarketfordiagnosticcenters.Theuseofdiagnosticserviceshasrisennotably
intheregionduetotheagingpopulationandprevalenceofailments(suchasdiabetesandhighcholesterol
levels) that require continuousmonitoring and recurringmedical treatments.Moreover,with the number
oftestspercapitaintheMENAregionstillbelowinternationallevels,thereisclearpotentialforgrowthin
diagnosticcompaniesintheregion.
Insummary,thehealthcaresectorprovidesaveryfavorableenvironmentforinvestors.However,itisimportant
toappreciatethechallengesaheadinordertodeveloptherightstrategiesforsuccess.
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THOUGHTLEADERSHIP
Thought Leadership:
Investing in Education – Lessons Learned from the First Round
By Imad Ghandour, Managing Director, CedarBridge Partners
Theeducationsectoroffersauniquepropositionforinvestors:stickyandgrowing
demand, stable cash flow, positive cash cycle, and healthy margins. These
characteristicsbecamemorerelevantafterthefinancialcrisisasinvestorpreferdefensivesectorswithstability
andpredictability.
Privateequity investors inMENAwanted to follow the same trend,and fundmanagers tried to focuson
educationandotherdefinitivesectorspost-crisis.Educationinparticularseemedtobenefitfromfavorable
demographics, increasing disposable income, a shift from public to private education, and huge fiscal
expenditure.
However,theeducationsectorinparticularremainedelusivetoprivateequity.Onlyfewtransactionswere
registered.Fundmanagerscomplainedthattherearefewdealsavailable,andthoseavailablewerefullypriced.
Moreover,thosethatinvestedinthesectorfacedtheinevitablescrutinyattachedtosocialservices,limiting
theirmaneuverabilityintermsoftuitionincreases,newlicenses,newservices,andevenexitpossibilities.The
mediaandtheregulatorsareincreasinglydebatingprivateequity’sroleineducation.
Yet, familygroupscontinuetoreapsignificantdividendsfromtheeducationsectors. As Ihaveexamined
hundreds of investment opportunities in the sector, I have invariable noticed how lucratively the initial
investorshavebeenrewardedandhowsignificantthebusinessmarginswere.Hence,theproblemmaynot
bewiththesector,butwiththestandardprivateequityapproachwheninvestingineducation.
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THOUGHTLEADERSHIP
Inmyview,privateequityinvestorshavetakenhomelessonsfromitsfirstroundofinvestments:
• Thinklongterm:thetraditionaltimeframeofaprivateequityinvestmentof3to
5yearsseemsunfitforeducationbecauseyoucanonlyaffectchange(e.g.increase
tuition,openanewbranch)onceayear.
• Focusoncapacitybuildingbeforemarginimprovement:privatecapitalismost
welcomedwhenitinitiallyseekstobuildnewcapacity.Focusingintheearly
stagesontuitionincreasesandmarginimprovementbringsunwantedfriction.
• Enterearly:enteringattheearlystagesofthebusinesslifecycleallowsyoutobe
rewardedbythegrowthinenrollment,whichremainsthehighestcontributorto
profitgrowth.Thiswillalsoincreasetheinvestiblespace.
• Talkeducationbeforefinance:dropthefinanciershatandtalkabouteducatingthe
kids.Also,private-equitersarekeentopublicizetheirachievementsandtheir
investments,butthisisasectorwherelesstalkwillimprovereturns.
• Lookatothersubsectors:K-12maybethebiggestsubsector,butothersubsectors
likenurseries,e-learning,highereducation,etcmaybemorelucrativeand
attractive.
Educationremainsanattractiveandgrowingsector,butasectorthathasitsoperationalparticularitiesand
socialsensitivities.Thesecondroundofinvestmentsmaybenefitfromtheseexperiencesandyieldevenbetter
outcomes.
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PRIVATEEQUITYINTHEMENAREGION
Similar to thedata limitationsmentionedpreviously inrelationto investments,asignificantportionofPE
divestmentsareeitherunannouncedor,wherethedivestmentisannounced,thevalueisundisclosed.Asa
result,wehavefocusedonanalyzingthenumberofdivestmentsasopposedtothetotalvalue.
2011sawasignificantincreaseinthenumberofdivestments(30divestments)comparedtorecentyears(23
divestmentsin2010).
However,despiteanincreaseindivestments,theimpactoftheglobalfinancialcrisisonliquidity,valuations
andinvestorappetitehasresultedinlongerthananticipatedholdinghorizonsforprivateequityinvestments.
ThePE industryhas increased its focus in recent years tomaximizingvaluewithin theportfolio through
strategicandoperationalperformanceimprovements.Goingforward,andastheregionaleconomiesstabilize
andliquidityinthemarketimproves,onewouldexpectafurtherincreaseinthenumberofdivestments.
Tradesalestoothercompaniescontinuetobethemostpopularexitstrategyandinmostinstances,theystill
offeramoreviableexitthanapublicmarketexit,duetothelackofliquidityinmostregionalmarkets.
3.6 EXITS
Source: Zawya Private Equity Monitor and AMIC.
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THOUGHTLEADERSHIP
Thought Leadership:
Private Equity and the Arab Spring
Saad Zaghloul, Managing Editor, Alborsa newspaper
Numerousarticlesandbookshavebeenwrittenabout theshockingrevolutions
thatstormedtheArabworldin2011.Mostofthesewritingsarepoliticalinnature.
Veryfewhavewrittenaboutthe impactof theArabSpringforrisk-takers.Veryfewhavehighlightedthe
lifetime opportunity theArab Spring has revealed for patient investors. However, today, this enormous
opportunityisunfoldingforthosewhohavethevisiontograbit.
ThisisexplainedtakingoneexamplefromthelargestArabSpringcountry:Egypt.
Egypt’srevolutioncameasashockforeveryone.Ifwefocusonthebusinessandinvestmentcommunity,the
revolutionre-setallpre-setbusinessplansandinvestmentprojections.Egypt’seconomicboomhadalready
beenimpactedbytheeffectsoftheglobaleconomiccrisisbeginningtwoyearsearlier,withRealGDPgrowth
decliningfrom7.2%to5.1%in2010.
In the midst of revolution, Egypt’s economy still managed to record positive growth in 2011 of 1.8%.
Astonishingly,thisrateexceededtheMENAoilimportersaverage,whichrecorded1.4%.However,Egyptis
consciouslyawarethatthecostofitsrevolutionwillextendthrough2012,withprojectedGDPgrowthatjust
1.6%.
TheEgyptianstockmarkethasalsosufferedseverecapitalflightbybothforeignandArabinvestors,receiving
thedubiouslabelin2011of“theworld’sworstperformingmarket”.Egypt’sboursedroppedby49%in2011
anddailyvolumeshitrecordlows.
Asnegativescorespoured in fromthe ratingagencies, EgyptianT-billsandT-bondsrates rose to record
highs,makingitmoreandmoredifficultforEgypttoraisedebtandattractinvestment.
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THOUGHTLEADERSHIP
Whenwereflectonhowtherevolutionhasaffectedinvestmentdecisions,wefindthatithastakenallofthe
politicaluncertainty–whichhadconcerned investorsbefore therevolution– and forced it tomove from
thefuturetothepresent.Thisisnotactuallyabadthingforinvestment.Riskisfriendliertoinvestorsthan
uncertainty.Investorscanpricerisk,whiletheyfindithardtoputapriceonuncertainty.
Egyptdecidedtoanswerallitspoliticalwhat-ifquestionsin2011and2012,resultinginaclearer,morestable
politicalsystem.ThisisaverydifferentviewtotheimpactoftheArabSpring.
Overall,Egyptisnottherightplaceforashort-termorientedinvestor.Egyptistheidealplaceforapatient
long-terminvestor.
39
4 SURVEYOFGPsINTHEMENAREGION
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4 SURVEYOFGPsINTHEMENAREGION4.1 INTRODUCTION
ThesurveyfocusesonGPsintheMENAregion.Thesurveyconsistedof36questionsandwasconducted
duringthefirstquarterof2012.Theaimofthesurveywastoobtainagreaterunderstandingofthesentiments
oftheMENAregion’sprivateequityindustryfromtheperspectiveofGPs.
Methodology
The surveywaspreparedbyZawyaandwas conductedonlinewithparticipation fromrepresentativesof
26private equityhouses in theMENAregion (including the top tenprivate equityfirmsby fundsunder
management).Participatingfirmshadinvestmentsinarangeofindustriesacrossawidegeographicalspread.
Scope of the survey
Thesurveylooksbrieflyattheimpactoftheeconomicdownturnandpoliticalinstabilityintheregionduring
2010-2011,andaimstounderstandGPexpectationsandviewsaroundtheoutlookfor2012.
Profile of the respondents
Halfoftherespondentsestablishedtheirprivateequityfirmswithinthelastfiveyears,withapproximately
aquarterbeinglessthanfouryearsold.TheprivateequityindustryintheMENAregionisrelativelyyoung
byinternationalstandards.65percentofparticipatingfirmshavelessthan$500millionworthofassetsunder
management.
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When was the company established?
WhiletheprivateequityindustryintheMENAregionisstillnascentcomparedtomoredevelopedmarkets,
morethanhalfoftheparticipatingprivateequityfirmshavebeeninoperationforfiveormoreyears.It is
interestingtonotethatdespitetheimpactoftheglobalfinancialcrisisandpoliticaluncertaintyintheregion,
threeoftherespondentfirmswereestablishedduring2011.
Who owns the fund management company?
73percentofrespondentsstatedthatmanagementholdsownershipinthefundmanagementcompany,with
onethirdofthosebeingamajorityshare.
4.2 SURVEY RESULTS4.2.1 RESPONDENT PROFILE
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How many funds have you managed since establishment?
Giventherelativeyoungageoftheprivateequityindustryintheregion,itisnotsurprisingthat42percentof
respondentshavemanagedjustoneortwofundstodate.
What is the total value of assets under management?
45percentofrespondentshadlessthan$250millionworthofassetsundermanagement.
Greaterthan5
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How many companies are there in your portfolio?
Withhalfoftheprivateequityfirmsintheregionhavingbeenestablishedforfiveyearsorless,itislogicalto
expectthemajorityofrespondents(58percent)tohavefewerthantencompaniesintheircurrentportfolio.
Do you expect the economic situation to: improve/decline/status quo/unclear
Respondents were fairly optimistic with almost half of the respondents anticipating improved economic
conditionsduring2012.38percentoftherespondentswereeitherunclearintermsoftheeconomicoutlook
orbelievedthatthecurrenteconomicsituationwillcontinue,and16percentbelievedtheeconomicsituation
wouldworsen.
4.2 .2 OUTLOOK
NotDisclosed
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What do you expect to be the main challenges during 2012?
Fundraisinghasprovenchallengingsince2009and42percentofrespondentswereoftheviewthatthiswill
remainachallengefortheindustryin2012.Justoverahalf(54percent)ofrespondentsanticipatedfinding
newinvestmentopportunitiesandexitingofexistinginvestmentstobekeychallengesfortheindustryin2012.
What are the main challenges in 2012 for the MENA Private Equity Industry?
Whilstnooneresponsestandsout,37%ofrespondentsbelievethat‘findingtherightdealattherightprice’
(qualityofdealflow,highvaluationsandacceptanceofPEfundsaspartners)willbeakeychallengeduring
2012. 40% of respondents aremore concerned about ‘portfolio level issues’ (corporate governance, bank
financing,growthprospectsandlackofcontroloverdeals).
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SURVEYOFGPsINTHEMENAREGION
In 2012…
38 percent of respondentswere not confident in LPsmeeting their expectations in 2012,while 35%were
confidentthatLPexpectationswouldbemet.50%oftherespondentsbelievethatvaluationswillbelowerin
2012comparedto2011.Lowervaluationsmaypotentiallyofferattractiveinvestmentopportunitiesbutmay
alsopotentiallyhaveanimpactontimingofexits.
What will managers focus on during 2012?
During2011,fundmanagersprimarilyfocusedonmanagingexistingportfolios.Astheinvestingandeconomic
environmentimproves,themajorityofrespondentsbelievefocuswillshifttowardsfindingnewinvestment
opportunitiesandexitingcurrentinvestments.
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SURVEYOFGPsINTHEMENAREGION
What is the most important attribute for a private equity firm to win a deal?
The existence of a good network is seen by a large proportion of respondents (46 percent) as the most
importantattributerequiredtosuccessfullycompleteacquisitionsintheregion.Thisispresumablylinkedto
thechallengesinsourcingdealsashighlightedbymanyrespondents.Flexibilityonacquisitiontermstogether
withmanagementandoperationalexpertiseareconsideredbymanytobemostimportant.
During 2011, how do you view entry multiples?
Opinionswereequallysplitonwhetherentrymultiplesduring2011weretoohigh.Thisreflectsanarrowing
intheexpectationsgapbetweensellersandinvestorsinrelationtothevaluationoftargets.During2010,58
percentofrespondentsfeltthatentrymultiplesweretoohigh.
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How many entry deals do you expect to see in 2012?
Thevastmajorityofrespondentsexpect2012tobearelativelyquietyearintermsofdealactivity.
What types of deals are expected to take place in 2012?
Almosthalfofrespondents(49percent)believethatgrowthandventurecapitalinvestmentswillcontinueto
bepopularin2012.Itisinterestingtonotethat27percentofrespondentsexpectbuyoutdealstobepopular
in2012whichisincontrasttolastyear’ssurveywhichsawjust8percentofrespondentsexpectingbuyout
dealsin2011.
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In your opinion, what will be the average deal size in 2012?
Themajority of respondents anticipate the averagedeal size in 2012 to bebetween $20million and $40
million.Thismarksanincreaseonactualaveragedealsizein2011.
How many funds do you expect to be launched/raised in 2012?
Thevastmajorityofrespondentsremaincautiousaboutfundraisingprospectsfor2012andbelievethat
fewer thanfive fundswillbesuccessfully launched.Thisexpectation is in linewith2011’sactual results
whichsawsixfundssuccessfullylaunchingandraisingduringtheyear.
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SURVEYOFGPsINTHEMENAREGION
In your opinion, what will be the main source of funds for new funds launched in 2012?
Inlinewithlastyear’ssurvey,themajorityofrespondents(64percent)expectfundstocomefromwithinthe
regionthroughhighnetworthindividuals,institutionalinvestorsandSovereignWealthFunds.
If you plan to launch a new fund, what would be the fund type and target market?
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SURVEYOFGPsINTHEMENAREGION
Growthcapitalfundscontinuetobethepreferredtypeoffundfor35percentofrespondents.Thisfurther
reflectstheincreasingpopularityofgrowthcapitalfunds.
Incontrasttolastyear(25percentin2010),35percentofprivateequityfirmsintheregionperceiveinternational
institutionalinvestorsasthetargetmarketforfundstobelaunched.Thisisinlinewiththeexpectationof42
percentofrespondentsthatinternationalinvestorsareseeingvalueandseekingopportunitiestoinvestin
theregion.
In your opinion, what will be the average size of funds raised in 2012?
92percentofrespondentsexpecttheaveragesizeofnewfundsraisedin2012tobelessthan$250million.45
percentofallfundsraisedduring2011hadanITSoflessthan$500million.
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In your opinion, what will be the holding period of private equity investments?
Themajorityofrespondents(84percent)believethatfirmswillholdontoinvestmentsforfouryearsor
more,whichisinlinewiththetypicalinvestmentholdingperiodforprivateequityfirms.
What is the most important role of private equity firms in their portfolio companies?
Privateequityfirmsseestrategicplanningasthemostimportantroletoprovidetoportfoliocompanies.
This isadeparture fromthe2010survey inwhich themajorityof respondents (29percent)viewedthe
provisionofoperationalsupportasthemostimportantrole.
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What will be your target IRR in 2012?
Thevastmajority(65percent)offundmanagersaretargetinganIRRbetween20and29percentfor2012.
Thisisinlinewithresponsesreceivedduringthelasttwoyears(63percentfromthe2010surveyand64
percentfromthe2009survey).
What will be the most attractive exit routes during 2012?
Inlinewithlastyear’ssurvey,tradesalescontinuetobethemostattractiveexitstrategyamongstfund
managerswhilefinancialsales,IPOsandmanagementbuybacksareconsideredlessattractive.
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SURVEYOFGPsINTHEMENAREGION
Regions of interest
Despitetheimpactoftheeconomiccrisisandrecentpoliticaluncertainty,theMENAregioncontinuestobe
thefocusofprivateequityfirmsintheregion.Thisisprimarilybecauseoftheregion’slargeandgrowing
population,growingmiddleclass,increaseinpercapitaincome,continuingdemandforinfrastructureand
highgovernmentspendingbudgets.
What sectors were private equity firms interested in during 2011?
In linewith2010’s survey results,privateequityfirmscontinue to focusonnon-cyclicalanddefensive
sectorssuchashealthcare,FMCGandeducation.
4.2.3 REGIONS AND SECTORS OF INTEREST
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SURVEYOFGPsINTHEMENAREGION
How did the global economic turmoil impact the private equity industry in the MENA region?
Withtheglobaleconomicenvironmentlimitingopportunitiesforinvestmentinstagnantwesterneconomies,
42percentofrespondentsfeelthatinternationalprivateequityfirmswilllooktotargettheMENAregion.
Is the political uncertainty in the region affecting investment decisions in terms of sector focus?
Themajorityof respondents (58percent)believe thatpoliticalunrest in the region isnot impacting their
investment decisions in terms of sector focus.Manywere already focused onmore defensive sectors in
responsetotheeconomicsituation.
4.2.4 THE IMPACT OF THE FINANCIAL AND POLITICAL CRISIS
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SURVEYOFGPsINTHEMENAREGION
How is the political shakeout impacting investment decisions in countries with unrest?
Politicaluncertaintyintheregioncontinuestoencourageastrategyofdelayinginvestmentsinthecountries
withunrest.andbeingincreasinglyselectivewithinvestmentopportunities.
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5 ABOUT THE MENA PRIVATE EQUITY ASSOCIATION & AMIC
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MENA PRIVATE EQUITY ASSOCIATION
MENA Private Equity Association
TheMENAPrivateEquityAssociation is anon-profit entity committed to supportinganddeveloping the
privateequityandventurecapitalindustryintheMiddleEastandNorthAfrica.
TheAssociationaimstofostergreatercommunicationwithintheregion’sprivateequityandventurecapital
networkandfacilitateknowledgesharinginordertoencourageoveralleconomicgrowth,andwillactively
promotetheindustry’ssuccessestolocalstakeholdersandbuildtrustwithinvestors,regulatorsandthepublic
regionallyandinternationally.
www.menapea.com
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AMIC
MOROCCAN VENTURE CAPITAL & PRIVATE EQUITY ASSOCIATION (AMIC)
Foundedin2000,AMICisanindependentprofessionalassociationwhosemissionistounite,representand
promotetheprivateequityprofessiontolocalandinternationalinvestors,entrepreneursandgovernmental
bodies.
AMIC’smainmissionistostrengthentheprivateequityindustry’scompetitivenessinMoroccoandabroad
through:
•Effectiveandclearcommunicationontheprivateequityindustry
•ExecutingreliablereportsandsurveysonthestateofprivateequityinMorocco
•Activeparticipationindiscussionsonanydraftlawregulatingthesector
•Establishingagoodgovernanceandethicscodefortheprivateequityindustryandpromoting
compliancewithsuchcode
•Providingsupportservicestomembersonregulatoryissuesrelatedtotheprofession
•Developmentofaqualitytrainingprogramonallaspectsoftheprivateequityindustry
Contact:FrançoiseGiraudon–[email protected]
Address:23,BoulevardMohamedAbdou(siègeCGEM)–QuartierPalmier–20340Casablanca-Maroc
59
6 SPONSOR PROFILES
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Zawya is the leading online business intelligence platform focusing on theMiddle East &NorthAfrica,
enablingnearly1millionprofessionalstofindandconnecttotherightbusinessandinvestmentopportunities
intheregion.
Ourwiderangeofuniquecontentandtoolsincludedetailedprofilesonthetopcompaniesandprojectsinthe
MiddleEastandNorthAfrica,ZawyaDowJoneslivenews,comprehensiveindustryandassetclassresearch,
aswellasanexclusiveonlinenetworkforprofessionalsfocusingontheregion.
Formoreinformation,pleasevisitwww.zawya.com
ZAWYA
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ABRAAJ CAPITAL
TheAbraajCapitalgroupisaleadingprivateequitymanagerinvestingingrowthmarkets.Sinceinception
in2002,thegrouphasraisedoverUS$7billionanddistributedinexcessofUS$3billiontoinvestors.With
overUS$6billioninassetsundermanagement,thegrouphashelpedaccelerateandfacilitatethegrowthof
morethan50companiesin15countriesintheMiddleEast,NorthAfricaandSouthAsia(MENASA)regionin
sectorsasdiverseashealthcare,education,energy,aviationandlogistics.
Employing over 95 investment professionals, the group is headquartered inDubai andhas a presence in
Algiers,Amman,Beirut,Cairo,Casablanca,Istanbul,Karachi,London,Mumbai,Ramallah,Riyadh,Singapore
andTunis.FundsmanagedbytheAbraajCapitalgrouphaveholdingsinover35companiesincludingAir
Arabia,theMiddleEast’sleadinglowcostcarrier,NetworkInternational,thelargestindependentpayment
solutionsproviderintheMiddleEastandAfrica,IHHHealthcareBerhad,oneofthelargestprivatehealthcare
groupsingrowthmarketsandAlBorgLaboratories,theMiddleEast’slargestprivatelyownedmedicaltesting
laboratory.
In2011,AbraajCapitalwasrankedthelargestprivateequityfirminemergingmarketsworldwidebyPrivate
EquityInternational.Inaddition,AbraajCapitalhaswonmanyregionalandinternationalawards,including
the‘MiddleEasternPrivateEquityFirmoftheYear’forsevenconsecutiveyears,awardedbyPrivateEquity
International.
WiththecompletionoftheAureosCapitalacquisitionin2012,AbraajCapitalhasapresenceinmorethan
30 countries across growth markets, over 150 investments managed by a dedicated team of investment
professionalsandapproximatelyUS$7.5billioninassetsundermanagement.
AbraajCapitalLimited,amemberof theAbraajCapitalgroup, is licensedbytheDubaiFinancialServices
Authority(DFSA).
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AFRICINVEST-TUNINVEST
AfricInvest-TunInvestGroupwasfoundedin1994andispartofaninvestmentandfinancialservicesgroup:
Integra Partners (www. integrapartners.com). Integra Partners offers Private Equity, Brokerage, Asset
ManagementandCorporateFinanceservices.
AfricInvest-TunInvestGroupisoneoftheleadingprivateequityfirmsinNorthandsub-SaharanAfricawith
over$700millionoffundsundermanagementacross11PEfundssponsoredbyprestigiousDFIs,international
privateandinstitutionalinvestors.
ThecoveredandtargetedregionevolvedduringthelifeoftheGroupfromTunisiaforthefirstgenerationof
fundswithrelativelysmallinvestments,totheMaghrebregion(MaghrebPrivateEquityFundsI,II&III)and
Sub-SaharanAfrica(AfricInvestFundsI&IIandAfricInvestFinancialSectorFund)withlargerinvestments.
AfricInvest-TunInvest Group has today over 17 years of experience in impact investments in SMEs and
supportedover100SMEsinAfrica.
TheGroupreliesonateamof40investmentprofessionalswithover120yearsofcumulativePEexperience,
operatingoutof6offices:Tunis,Abidjan,Algiers,Casablanca,LagosandNairobi.
AfricInvest-TunInvestGroupisaco-founderandactivememberoftheAfricanVentureCapitalAssociation
(www.avcanet.com),theMENAPEAssociation(www.menapea.com)andtheEuromedCapitalForum(www.
euromed-capital.com).
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NBK CAPITAL
NBKCapital isa leading investmentcompanyestablished in2005by theNationalBankofKuwaitoneof
theMiddle East region’s oldest and highest rated banks. NBKCapital delivers its products and services
throughfourprincipallinesofbusiness:AlternativeInvestments,AssetManagement,Brokerage&Research
andInvestmentBanking.Withover170professionalsandofficesinKuwait,Dubai,IstanbulandCairo,NBK
Capital’slocalknowledgeandexpertiseallowsthefirmtodeliversuperiorresultstoinvestorsandclients.
TheAlternativeInvestmentsGroupatNBKCapitalmanagesc.USD550millioninassetsundermanagement
focusedongrowthcapital formid-market companies located throughoutMENAandTurkey.Thegroup’s
trackrecordincludesprivateequityandmezzanineinvestmentsacrosstheRegioninSaudiArabia,Kuwait,
Qatar,UAEandTurkey.Leveragingahighlyskilledinvestmentteam,NBKCapitalhasdeliveredvaluefor
investorsthroughanactiveinvestmentapproachimplementingstrategic,operationalandfinancialinitiatives
atportfoliocompanies.
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QATAR FIRST INVESTMENT BANK
QatarFirstInvestmentBank(QFIB)isapioneeringIslamicfinancialinstitutionprovidingafull-fledgedsuite
ofinvestmentbankingserviceswellpositionedtoworkacrossthebroaderMENAregion.TheBanklaunched
in2009withanauthorizedcapitalofQAR3.65billion(US$1bn)andapaidupcapitalofQAR1.6billion(US$
430million)providingthefinancialstrengthtocapitalizeonlucrativeinvestments.
QFIB is the first independent Shari’ah compliant investment bank licensed by theQatar FinancialCentre
RegulatoryAuthority(QFCRA)andisISO27001certified,offeringPrincipalInvestments,AssetManagement
andCorporateFinanceAdvisoryservices. QFIB’sdynamicbusinessstrategy isdrivenby itsmanagement
teamwithanentrepreneurialoutlookthatencouragesinnovationandcreativityinmeetingclientneeds.The
Bank’smediumtolong-termviewensuresclientscanbenefitfromtheleadership’sinsightandconnectionsin
providingstrategicadvice,raisingcapitalanddeliveringriskmanagementsolutions.
QFIB is unique in Qatar, simultaneously independent and central to the market, providing clients and
counterpartieswithaccesstooneoftheregion’sdeepestpoolsofcapital.Adoptinganinvestmentstrategy
thatcentersonsectorandgeographicaldiversification,QFIB’sfocusareasincludeenergy,financialservices,
industrials,realestate,andhealthcareservices.QFIBinvestsinbusinessesthatmaximizeshareholdervalue
throughrobustgrowthandsignificantcapitalappreciation.Sinceinception,QFIBhasexecutedanumberof
transactionsin–fivedifferentsectorsacrossthreegeographies,andsuccessfullyexitedtwoinvestments.
ReaffirmingitsstatureasagrowingShari’ahcompliantinvestmentbank,QFIBaimstolistitssharesonthe
QatarExchangeinQ42012.Thismovewillprovideexistingshareholderswiththeabilitytotradetheirshares
and,further,willprovideQFIBthemeansandcapitaltorealizeitsgrowthplans.
QFIBwasrecognizedasthe“BestInvestmentBankintheGCC”underIslamicBusiness&Financecategory
byCPIFinancialin2011andhaswontheaccoladeofthe“BestFinancialServiceIndustryDeploymentofthe
Year”byComputerNewsMiddleEast.
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SWICORP
Swicorpisaleadingcorporatefinanceadvisory,privateequityandprincipalinvestmentfirmwithaspecific
regionalfocusontheMiddleEastandNorthAfrica(MENA)region.
Foundedin1987andlicensedbytheCapitalMarketAuthorityoftheKingdomofSaudiArabia,andtheDubai
FinancialServiceAuthorityoftheUnitedArabEmirates,Swicorphasanextensivetrackrecordofpioneering
M&AandAdvisorytransactionsacrosstheMENAregionoverthelast20years.HeadquarteredinRiyadh
withregionalofficesinJeddah,Geneva,Tunis,DubaiandAlgiers,thefirmhasover100employeesacrossits
officesandactivities,including30privateequityprofessionalsfrombothwithinandoutsidetheregion.
Sincethelaunchofitsprivateequityactivitiesin2004,Swicorphasestablisheditselfamongtheleadingprivate
equitymanagersintheMENAregion,withnearlyUSD1.4billioncurrentlyundermanagementacrosstwo
separateinvestmentprograms,includingIntajCapitalandSwicorpJoussour.
Intaj Capital is a pan-MENA focused private equity fund investing in companies operating in sectors
drivendirectlyor indirectlybygrowth inconsumerdemand.Sectors includeconsumergoods,retail, food
and beverage, media and communications, consumer financial services, healthcare and consumer-facing
constructionmaterials,amongothers.Intajpursuestwomaininvestmentstrategiesforbuildingaplatformof
valuecreationinitsportfoliocompanies:growthandbuy&buildinvestments.IntajCapitalI,thefirstfund
launchedin2005,investedUSD187million,USD290millionincludingco-investmentsfromlimitedpartners,
ineightinvestmentsacrosssevencountries,welldiversifiedintermsofbothgeographiccoverageandsectors.
IntajCapitalII,whichrepresentsthesecondprivateequityvehicleoftheIntajfranchise,hadafirstclosingin
September2010withcommitmentsfromleadinginternationalinstitutionalLPs.
Joussourwas founded in 2005withUSD1billion in capital commitments. Joussour focuses on large-scale
investmentsintheenergysector,petrochemicalsandancillarybusinessestothepetrochemicalindustry,and
energy-intensive sectors, through greenfields and joint ventures with international partners or buy-out/
relocationofinternationalplayersinthesector.
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7 MEMBERS DIRECTORY
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MEMBERS DIRECTORY
AbraajCapital
Dubai,UAE
Egypt,Jordan,KSA,Lebanon,
Pakistan,Singapore,Turkey,Palestine
Tunisia,Algeria,Morocco,London
+97145064400
www.abraaj.com
AfricInvest-Tuninvest
Tunis,Tunisia
Algeria,IvoryCoast,Kenya,
Morocco,Nigeria
+21671189800
www.tuninvest.com
AlMasahCapital
Dubai,UAE
Kuwait
+971-4-453-1500
www.almasahcapital.com
AmwalAlKhaleej
Riyadh,KSA
Egypt,UAE
+96612164666
www.amwalalkhaleej.com
MEMBERS DIRECTORY7CapitalTrustGroup
Beirut,Lebanon
UK,USA
+9611368968
www.capitaltrustltd.com
CedarBridgePartners
Cairo,Egypt
UAE
www.cedar-bridge.com
CitadelCapital
Cairo,Egypt
Algeria,Kenya
+20227914440
www.citadelcapital.com
DubaiSiliconOasisAuthority
Dubai,UAE
+97145015206
www.dso.ae
EastgateCapitalGroup
Dubai,UAE
+97143297171
www.eastgategroup.com
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MEMBERS DIRECTORY
EmergingCapitalPartners(ECP)
Tunis,Tunisia
IvoryCoast,Cameroon,France,Morocco,
Nigeria,SouthAfrica,WashingtonDC
+216-71-962-590
www.ecpinvestments.com
EFGHermesPrivateEquity
Cairo,Egypt
UAE
+97143641961
www.efg-hermes.com
GulfCapital
AbuDhabi,UAE
+97126716060
www.gulfcapital.com
InternationalFinanceCorporation(IFC)
Washington,DC,USA
+1(202)473-3800
www.ifc.org
InvestcorpBank
Manama,Bahrain
UK,USA
+97317532000
www.investcorp.com
MalazCapital
Riyadh,KSA
+96614601644
www.malazcapital.com
MasdarCapital
www.masdar.ae
MubadalaGECapitalPJSC
AbuDhabi,UAE
+97124013108
www.mubadala-ge.com
NationalBankofAbuDhabi–PrivateEquity
AbuDhabi,UAE
+97126112268
www.nbad.com
NBKCapital
Kuwait
Egypt,Turkey,UAE
+96522246900
ww.nbkcapital.com
N2V
Egypt,Jordan,KSA,UAE,USA
+971552100706
www.n2v.com
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MEMBERS DIRECTORY
NewSilkRoute
Dubai,UAE
India,USA
+97143211772
www.nsrpartners.com
QatarFirstInvestmentBank
Doha,Qatar
+9744483333
www.qfib.com.qa
ReAyaHolding
Jeddah,KSA
+96626676777
www.reayaholding.com
RiyadaEnterprise
Development
Dubai,UAE
Egypt,Jordan,Lebanon,Palestine
+97145064400
www.riyada.com
SEDCO
Jeddah,KSA
UAE
+97143637166
www.sedco.com
Swicorp
KSA,UAE,Tunisia,Algeria,
Switzerland
+96612110737
www.swicorp.com
TVMCapital
Dubai,UAE
Germany,USA
www.tvm-capital.ae
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8 PRIVATE EQUITY & VENTURE CAPITAL FIRMS IN MENA
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PRIVATE EQUITY & VENTURE CAPITAL FIRMS IN MENA
PRIVATE EQUITY & VENTURE CAPITAL FIRMS IN MENA8AbraajCapital
AbuDhabiCapitalManagement
AbuDhabiInvestmentCompany
AbuDhabiInvestmentHouse
AcceleratorTechnologyHoldings
ADCBMacquarieCorporateFinance
AlImtiazInvestmentCompany
AlMalCapital
AlMasahCapitalManagementLimited
AlcazarCapitalLimited
Amundi
AmwalAlKhaleejCommercialInvestment
Company
ArbahCapital
AttijariwafaBank
AureosMoroccoAdvisers
BeltoneAgricultureManagement
BeltonePrivateEquity
Berytech
BMACapital
BMCECapital
CapitalInvest
CapitalTrust
CapivestInvestmentBank
CarlyleMenaInvestmentAdvisorsLimited
CatalystInvestmentManagementCompany
CDGCapital
CedarBridgePartners
CERTCapital
CitadelCapital
ConcordInternationalInvestments
CorporateFinanceHouse
DamanInvestments
DBClimateChangeAdvisors
DeltaPartners
DeutscheBank
DubaiIslamicBank
EastgateCapitalGroup
EducationCapital
EFG-HermesPrivateEquity
EmergingCapitalPartners
EmergingMarketsPartnership(Bahrain)
EVICapitalPartners
EvolvenceCapital
Fincorp
FoursanGroup
GlobalCapitalManagementLimited
GulfCapital
HBGHoldings
HSBCPrivateEquityMiddleEastLimited
IdeaVelopers
InjazatCapital
InstrataCapital
IntelCapital
InvestcorpBank
ITVentures/NileCapital
IthmarCapital
KIPCOAssetManagementCompany
KuwaitFinanceandInvestmentCompany
KuwaitFinanceHouseBahrain
KuwaitFinancialCentre
LevantCapitalLimited
MalazCapital
MasdarVentureCapital
MerchantBridgeandCo
MiddleEastCapitalGroup
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MiddleEastVenturePartners
MoroccanInformationTechnoparkCompany
NationalBankofAbuDhabi–PrivateEquity
NBKCapitalLimited
UplineInvestments
UnicornInvestmentBank
VentureCapitalBank
ViverisManagement
PrimeCorp(France)
QatarCapitalPartners
RAIS(Netherlands)
RasmalaHoldingsLimited
RiyadaEnterpriseDevelopment
RivayGarciaFinancialGroup
SabreAbraajManagementCompany
Saffar
SahamGroup
SamenaCapital
SawariVentures
SiparexGroup
SirajFundManagementCompany
SphinxPrivateEquityManagement
Swicorp
TheFinancialCorporationCompany
TheNationalInvestor
TVMCapitalMENALimited
Disclaimer: This publication is intended only to provide a summary of the subject matter covered. It does not
purport to be comprehensive or to render professional advice. No reader should act on the basis of any matter
contained in this publication without first obtaining professional advice.
PRIVATE EQUITY & VENTURE CAPITAL FIRMS IN MENA
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