PE crucial for Gulf economies
The growing impact of the multi-billion dollar private equity industry on the economic diversification of the Arabian Gulf is to be the subject of a special study to be released during the Private Equity Forum.
The region's private equity houses manage more than $13 billion in more than 70 funds and are playing a significant role in the creation of 47 million extra jobs required in the Middle East and North Africa over the next decade.
Private equity is also taking on riskier investments in innovative sectors, encouraging an entrepreneurial culture crucial for the region's economies. Above all, private equity is offering potentially high-returns for the large liquid asset pool of the Gulf Co-operation Council countries and attractive investment opportunities for high net worth individuals.
Private equity opportunities are emerging in key areas including family-dominated companies rationalising their operations; and enterprises wanting to increase operations, extend their geographic spread or form new partnerships.
The Forum will include a special presentation followed by a panel discussion and Press conference featuring key executives from Ithmar Capital and associates to introduce an exclusive study, in association with Dow Jones, on the impact of private equity on economic diversification in the GCC.
According to previous studies by Ithmar Capital and Dow Jones, within the GCC over 90% of all commercial activity is estimated to be controlled by family enterprises. These firms hold combined assets of more than $500 billion and employ 70% of the workforce.
Dubai-based Ithmar Capital, headline sponsor of the Private Equity Forum, is confident of the future growth of private equity in the region. The firm recently announced plans to raise $1 billion by launching a third close-ended private equity fund. Ithmar Capital currently has $500 million worth of assets under management through two existing funds.
Diamond sponsor M'Sharie also sees "enormous opportunities" in the Gulf private equity sector for discerning players. M'Sharie, the private equity arm of Dubai Investments, has 17 subsidiaries under its umbrella and positioning itself as a dominant player in the sector.
“While private equity deals globally have slowed to a trickle due to the credit crunch, the Middle East’s private equity market has not only bucked this trend but has actually managed to achieve record growth in 2007,” said Abdul Aziz Yaqoob Al Serkal, Managing Director of M’Sharie.