Private Equity and Venture Capital in the MENA Region 2016 report

Deloitte partnered with the MENA Private Equity Association and released the Private Equity and Venture Capital in the MENA Region 2016 report.

The report focused on an analysis performance (including investments, divestments, and fund raising activities in 2016) and in surveying fund managers to gauge their outlook for the industry going forward in a continuation of our regular Deloitte Private Equity confidence survey.

Key findings

The overall upsurge trend in investment activity continued in 2016, which was largely driven by the continued development of the venture capital industry in the region. Disclosed transactions reached 244, recording the highest since 2008.

The report states that 2016 marked divergence between trends in private equity and venture capital compared to previous years. The overall number of deals increased as venture capital investment levels continued to grow. The decline in the number of disclosed higher value private equity transactions led to a decline in the total value of investments made.

New money raised by private equity and venture capital funds in the MENA region dropped by 41 per cent last year– the lowest figure since 2011.

The UAE attracted 62% of MENA investment activity by value in 2016, a substantial increase from 2015. This is due to stability and availability of large and quality assets. The uncertain market conditions in the region attracted fund managers towards investing more in the UAE.

The UAE was the largest market in 2016 in terms of volume of deals, accounting for 34%.

Total divestment value stood at USD 462 million. The volume of divestments decreased to 14 in 2016 from 21 in 2015 with market conditions making target returns from exits more challenging.

While investments in the oil and gas industry continue to decline, consumer related business continued to be the main target sector for private equity investors.