Private Equity Investors in the Middle East and North Africa (MENA)

by Louise Weller

  • 15 Mar 2011
  • PE

The Middle East and North Africa (MENA) region has attracted a great deal of attention in recent months due to the ongoing social unrest in several countries. The area has not traditionally been considered to represent a key focus of the private equity industry, but Preqin’s data indicates that a variety of investor types have an interest in private equity opportunities in the region.

Of the MENA-based institutional investors that are known to invest in private equity, almost one-third (32%) are investment companies. Just under one-quarter (23%) are banks or investment banks, such as Bahrain’s Addax Bank, and 13% are sovereign wealth funds, such as Kuwait Investment Authority. Other types of private equity investors in the region include asset managers, public and private pension funds, foundations, corporate investors and insurance companies. Based in the United Arab Emirates, Kanoo Group and Emirates Insurance Company are examples of the latter two of these institutional investor groups participating in private equity investments.

Preqin’s Investor Intelligence database shows that 41% of LPs that have expressed a preference for MENA-focused private equity funds are located in North America, 23% are located in Europe, 8% are based elsewhere in the world outside of the MENA region, with the remaining 28% of investors located within the MENA region. An example of a North American investor with exposure to the region is Overseas Private Investment Corporation (OPIC). Based in Washington, DC, OPIC is known to have committed USD 150 million to KIPCO Opportunity Fund, which focuses on growth opportunities in the MENA region. Tokyo’s Nippon Oil Corporation committed USD 25 million to DB Masdar Clean Tech Fund, a fund managed by United Arab Emirates-based Masdar Venture Capital.

Government agencies are significant investors in the region and the International Finance Corporation (IFC) is known to have participated in ten private equity funds targeting MENA. This activity includes a USD 20 million commitment to Foursan Capital Partners I, which is a 2010-vintage fund that focuses on buyout opportunities in the MENA region. The IFC currently has assets under management of USD 61 billion, with 5.2% of this allocated to private equity.

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