Mena equity market 'to see increased activity'
Dubai, September 18, 2012
The investment activity in the Mena private equity market is set to increase in the next 12 months, said a new survey reflecting the bounce back in confidence amongst regional general partners.
The exit activity is also expected to see a pickup, after a lull in the last few years, according to thhe fifth Deloitte Private Equity Confidence Survey gauging the views of the regional private equity community, across the Middle East.
The results of the survey reflect a bounce back in confidence amongst regional General Partners (GPs) and a more positive outlook for the long term prospects for PE in the MENA region.
“This edition of the Deloitte Private Equity Confidence Survey is perhaps the most insightful so far. The general sentiment amongst the Mena PE community is one of optimism,” remarked Richard Clarke, managing director, Transaction & Restructuring Services, Deloitte Middle East.
"While in the past, GPs may have been hoping for increased deal activity and a bounce back in returns, today’s optimism is supported by our own experiences – there really has been and continues to be an increase in PE backed deals," Clarke stated.
"With the regional political situation starting to settle down, the investment environment is now more attractive than it has been since the beginning of the uprisings of the Arab Spring and moreover the global crisis," he added.
This is supported by the fact that over 75 per cent of respondents expect investment activity to increase in the Middle East over the next 12 months, reflecting the continued confidence in finding suitable investment opportunities and a general willingness to deploy capital for the right assets.
“Now more than ever, GPs are focusing on leveraging off intermediaries to help them find the right route to market whilst also assisting them to prepare portfolio companies for exit,” remarked Raj Mehta, the director of Transaction & Restructuring Services, Deloitte Middle East.
“Despite the challenges with exiting, GPs still expect to focus the bulk of their time on sourcing new investment opportunities. This says two things - that deals are still there to be done, and that fund managers are very much in deployment mode,” he added.
In terms of the sectors of most interest to PE investors, the Deloitte survey found that the main focus remained on the defensive sectors, such as education, healthcare and oil and gas services.
"However, there is also a growing interest for growth and demographically-linked sectors, such as consumer retail and food, which are expected to attract the most attention amongst the PE Community in the coming year," the survey added.-TradeArabia News Service