Middle East private equity flows despite credit crunch

Recent data shows private equity in emerging markets mergers and acquisitions little changed in the first quarter of 2008 against the same period last year, valued at some $8.3bn, say IIR Middle East organisers of the second Private Equity Forum taking place at Al Murooj Rotana Hotel, Dubai, 22-26 June 2008.

"In a region backed by robust fundamentals, private equity in the Arabian Gulf, comes mainly from sources such as high net worth individuals and institutions, less exposed to the global liquidity squeeze," said Deep Marwaha, the Forum Director.

According to recent reports, new amounts committed to private equity funds in the Middle East more than doubled in 2007 to $6bn. This brought the total money under the management of private equity to around $13.3bn in nearly 80 funds.

Egypt has been the leading recipient of private equity investments over the past decade with a market share of 37%. The United Arab Emirates comes second with 19% of investments. Saudi Arabia's share also rose sharply to 15%.
Forum Chairman, Ali Erfan, Senior Advisor to Ithmar Capital, a private equity specialist that targets growth capital and buyout opportunities in the Gulf Co-operation Council countries, said: "Some of the most senior and successful venture capital and private equity leaders from around the world and the GCC will gather in Dubai. They will sit together to share experiences and explore how the region might best seize the market opportunities that lie ahead."

The panel of high profile speakers will explore the trends and challenges of the burgeoning GCC private equity market at the forum which will offer streamed sessions focusing on opportunity sectors such as clean technology; financial services; IT, media and telecom; energy; healthcare and life sciences; and infrastructure and construction. Max von Bismarck, Head of Investors at the World Economic Forum, will also provide a keynote on the global economic impact of private equity.

"In the Arabian Gulf, private equity has to a large extent been focused on growth capital by taking stakes in companies to help them become more efficient and expand into new markets," said Marwaha. "It has also been biased towards real estate and infrastructure investment.

"In the future, it is expected the buyout market will increase as more family firms focus on fewer businesses and go regional. Private equity funds and firms are also looking further afield for opportunities. Favourite sectors include oil, gas and mineral firms, telecoms and banking."

There will be a pre-Forum Workshop on executing a successful initial public offering as a private equity exit by Andrew Tarbuck, a corporate finance lawyer with Norton Rose. A post-Forum Workshop over two days on Shari'ah compliant private equity investments will also be conducted by Professor Dr Monzer Kahf, one of the principal pioneers of structuring Islamic financial products.

Headline sponsor of the forum is Ithmar Capital, currently managing proprietary investments in excess of $500m across the region. Diamond sponsor is M'Sharie LLC, the corporate venture capital arm of Dubai Investments.