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Exclusively MENA-Focused Private Equity Funds in Market – February 2014

by Stuart Hunter

  • 11 Feb 2014
  • PE

In 2013, the number of exclusively MENA-focused funds that reached a final close fell from 12 in 2012 to just five; however, there was a 25% rise in the total amount of capital raised during the same period, with $900mn and just over $1.1bn raised in 2012 and 2013 respectively. Currently, there are 19 funds in market focused solely on investing in opportunities arising in North Africa and the Middle East. Collectively, these funds are aiming to garner a total just shy of $4bn in capital commitments. 

To get an insight into where the capital flows originate from, the 19 funds in market can be broken down by fund manager location. Four of these funds are being managed by United Arab Emirates-based private equity fund managers and are targeting just over $1bn in aggregate capital commitments, representing 32% of the overall amount of capital being sought. A significant 30% of the total capital is being sought by a combination of two funds managed by an India and a Canada-based fund manager. The Dubai Real Estate Fund is managed by Canada-based Brookfield Asset Management and is targeting a final close of $500mn to invest in the United Arab Emirates’ real estate sector, while the SC-IL&FS Infrastructure Growth Fund II is managed by India-based IL&FS Investment Managers and is aiming to collect $600mn to capitalize on infrastructure projects across the Middle East. 

Buyout and growth funds are the most abundant fund type for vehicles investing solely in the MENA region, with five funds each, aiming for an aggregate of just over $1bn and $755mn respectively. Real estate and infrastructure funds follow closely behind with two funds each, and aim to garner $750mn and $686mn in capital commitments respectively. The largest buyout fund in market focused solely on the region, GC Equity Partners III, is targeting $550mn and primarily focuses on businesses in the Gulf region, as well as Egypt and Jordan. The largest solely MENA-focused growth fund in market is the NBK Capital Equity Partners Fund II which is aiming to garner $300mn to invest in a range of industries in Turkey, United Arab Emirates, Saudi Arabia, Jordan, Kuwait and Oman.

So far, 10 out of the 19 funds in market investing solely on the MENA-region have managed to hold at least one interim close, collecting an aggregate of $768mn in capital commitments. Depending on the degree of investor sentiment towards the region and the levels of political stability, particularly in Egypt and Turkey, 2014 has the potential to extend on previous years of fundraising.

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