MENA private equity deals total $27.6bn over last 5 years: report

While the UAE dominated deal activity from 2020 to 2022, Saudi Arabia overtook it in 2023, accounting for 41 percent of total transactions that year. Reuters/File
While the UAE dominated deal activity from 2020 to 2022, Saudi Arabia overtook it in 2023, accounting for 41 percent of total transactions that year. Reuters/File
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Updated 03 March 2025
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MENA private equity deals total $27.6bn over last 5 years: report

MENA private equity deals total $27.6bn over last 5 years: report

RIYADH: Private equity deals in the Middle East and North Africa region totaled $27.6 billion between 2020 and 2024, with a compound annual growth rate of 14 percent, driven largely by Saudi Arabia and the UAE, according to a new report.

While the UAE dominated deal activity from 2020 to 2022, Saudi Arabia overtook it in 2023, accounting for 41 percent of total transactions that year.

In its inaugural MENA PE 5-Year Report, venture data platform MAGNiTT highlighted that this shift underscores Saudi Arabia’s growing attractiveness to investors, supported by Vision 2030 initiatives and increased sovereign wealth fund participation.

Saudi Arabia and the UAE accounted for 68 percent of total PE transactions in MENA from 2020 to 2024, with the former securing 31 percent and the latter 37 percent.

In terms of disclosed deal value, the UAE led with $13.5 billion, followed by Saudi Arabia at $11 billion. However, in 2024, Saudi Arabia contributed more than half of the region’s total disclosed PE investment value.

The Kingdom’s share of deal count rose from 20 percent in 2020 to 41 percent in 2023, reflecting a compound annual growth rate of 67 percent.

Egypt also played a key role in the region’s PE market, accounting for 9 percent of deal volume over the five-year period, with transactions totaling $2.5 billion. In 2024, Egypt held a 12 percent share of total disclosed PE investment value.

Meanwhile, investment in other MENA markets increased from 17 percent in 2021 to 22 percent in 2024, indicating rising interest in frontier markets beyond the UAE, Saudi Arabia, and Egypt.

PE activity

The report highlights the volatility of MENA’s PE market, where deal volume peaked at 97 transactions in 2022 before declining in 2023 and 2024.

In 2024, the number of deals dropped 24 percent year-on-year, reflecting a recalibration of investor strategies amid tightening credit conditions, rising interest rates, and the disappearance of leveraged buyouts.

Unlike global PE markets, which rebounded in 2024 with a 12 percent increase in deal volume and a 22 percent rise in deal value, MENA investors remained cautious, favoring strategic growth investments over debt-heavy transactions.

Investment types and trends

MENA’s private equity landscape has shifted significantly over the past five years.

In 2020, buyouts dominated 56 percent of transactions, but by 2024, their share had dropped to 29 percent, while PE growth deals surged to 71 percent.

By the end of 2024, investment value was nearly evenly split between PE growth at 51 percent and buyouts at 49 percent, reflecting a shift toward scaling businesses rather than outright acquisitions.

Most deals in the region fell below the $50 million mark in transaction size, while deals exceeding $1 billion captured the largest share of disclosed value.

Large-scale deals peaked at 77 percent of total PE value in 2023 before contracting to 47 percent in 2024, signaling investor caution regarding high-stakes acquisitions amid tighter financial conditions.

Leveraged buyouts, which had sporadic activity in 2021-2022, disappeared entirely in 2023 and 2024, reflecting weaker investor appetite for debt-heavy transactions.

Sector analysis

Healthcare led in deal count, with 64 transactions over five years, accounting for 18 percent of total PE deals.

Finance attracted the highest disclosed deal value, totaling $7.5 billion — 82 percent more than the manufacturing sector.

Telecom was another key sector, capturing 47 percent of MENA’s total PE value in 2024, underscoring a growing focus on digital infrastructure.

Other notable sectors included IT solutions, transport and logistics, sports and fitness, sustainability, and energy.

Activity breakdown

Sovereign wealth funds and institutional investors played a crucial role in shaping MENA’s private equity landscape.

The most significant transactions involved capital-intensive and scalable sectors, with Saudi Arabia’s Public Investment Fund and Abu Dhabi’s ADQ leading mega-deal activity.

Future outlook

MENA’s PE market is expected to recalibrate, with investors focusing on mid-market growth opportunities and sector-specific plays.

The anticipated return of global buyout activity and potential interest rate reductions could revive leveraged transactions in the region, though caution is likely to persist.

The continued involvement of sovereign wealth funds, particularly PIF and ADQ, will be instrumental in driving future deal flow.

Despite the sharp decline in PE investment in 2024, the region’s ongoing economic reforms, diversification strategies, and digital transformation initiatives position MENA for long-term private equity growth.

VC vs. PE

The report also highlights key differences between private equity and venture capital, emphasizing their distinct investment strategies.

While PE focuses on acquiring majority stakes in established enterprises to drive growth and prepare for exit, VC primarily involves minority investments in early to mid-stage startups, particularly in the technology sector.

PE investments typically target mid-stage to mature companies across various industries, with a moderate risk level. In contrast, VC investments carry higher risk, as they depend on the success of emerging businesses.

Financially, PE transactions involve controlling stakes of 51 percent or more, often reaching full ownership, with investment sums ranging from $100 million to $10 billion.

These deals typically combine equity and debt, with an expected exit timeline of six to ten years and an internal rate of return exceeding 15 percent.

VC investments, on the other hand, are generally below $10 million, consist solely of equity, and target minority stakes of less than 50 percent. VC investors anticipate exits within four to seven years and seek returns exceeding ten times their initial investment.


UAE, Kuwait, and Qatar sustain non-oil growth in April: S&P Global

UAE, Kuwait, and Qatar sustain non-oil growth in April: S&P Global
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UAE, Kuwait, and Qatar sustain non-oil growth in April: S&P Global

UAE, Kuwait, and Qatar sustain non-oil growth in April: S&P Global

RIYADH: The non-oil private sectors of the UAE, Kuwait, and Qatar continued their expansion in April, supported by strong demand, improving output, and stable employment conditions, according to the latest Purchasing Managers’ Index surveys released by S&P Global.

In the UAE, the headline PMI held steady at 54 for a second consecutive month, reflecting continued momentum in the country’s non-oil economy. While output growth eased to a seven-month low, firms ramped up hiring at the fastest rate in nearly a year to manage capacity pressures. New orders surged, underpinned by the strongest international demand in five months.

This robust performance aligns with a wider regional trend of economic diversification, as Gulf nations—including Saudi Arabia—work to reduce their long-standing reliance on oil revenues.

“The April PMI results signaled a notable uptick in hiring activity across the non-oil private sector,” said David Owen, senior economist at S&P Global Market Intelligence.

“After several months of mild increases in payroll numbers, despite robust sales growth, job creation rose to its highest level in 11 months.”

Owen noted that the hiring push was largely aimed at easing backlogs, which, while still rising, did so at the slowest pace in six months. “That said, employment growth was still modest overall, adding to suggestions that some firms may be struggling to recruit,” he added.

Any PMI reading above 50 indicates expansion in the non-oil private sector, while a figure below 50 denotes contraction.

Business confidence in the UAE climbed to its highest level so far in 2025, as firms cited strong demand pipelines and positive expectations. Input purchases rose again in April, though at a slower pace than March, which had marked a 68-month high.

“Firms are hopeful that elevated demand levels and strong pipelines, as characterized by steeply rising backlogs, should propel activity higher in the coming months,” Owen said.

Despite increased purchasing and faster supplier delivery times, stock levels remained largely unchanged for the second consecutive month. Business optimism also rose for the third straight month in April.

In Dubai, operating conditions in the non-oil private sector improved at a slower pace due to weaker growth in new business inflows. Nonetheless, order books continued to expand sharply, driving strong overall business activity. Employment rebounded in April after a brief dip in March, as companies aimed to boost capacity. However, firms in Dubai expressed subdued confidence about future activity, with sentiment among the lowest on record.

Kuwait sees strongest output

Kuwait's non-oil private sector saw significant gains in April, with the country’s PMI rising to 54.2 from 52.3 in March—marking one of the sharpest expansions on record since the survey began in 2018.

“It was a bumper start to the second quarter of 2025 for non-oil companies in Kuwait, with a further influx of new orders leading companies to expand output at one of the sharpest rates since the survey began,” said Andrew Harker, economics director at S&P Global Market Intelligence.

The expansion was driven by robust new order growth, supported by competitive pricing and strategic marketing efforts. However, firms faced rising input costs that made it harder to maintain price stability.

While employment rose only marginally, the minimal hiring contributed to a further buildup in outstanding work.

“It remains to be seen, however, whether firms will be able to keep restricting selling prices in a scenario where input costs are rising sharply,” Harker noted. “The coming months will illustrate the extent to which companies are happy to see margins come under pressure in order to keep orders flowing in.”

Kuwaiti firms also reported a notable increase in export orders. Optimism about future output remained high, supported by competitive strategies, product development, and marketing.

Qatar growth slows slightly

Qatar’s non-oil sector saw a slight dip in overall momentum in April, with its PMI falling to 50.7 from 52 in March. Despite the decline, the index stayed above the neutral 50 mark for the 16th consecutive month, reflecting continued—if slower—growth.

Output among Qatari non-energy firms rose for the first time in 2025, but the sector faced a drop in new business and a cooling labor market.

“The PMI indicated continuing growth of the non-energy private sector economy at the start of the second quarter, but there was a loss of momentum owing mainly to a renewed reduction in new business and slower employment growth,” said Trevor Balchin, economics director at S&P Global Market Intelligence.

“The latest figure of 50.7 was the lowest in three months and below the long-run trend level of 52.3, as weaker demand offset an increase in total output.”

Growth was led by the manufacturing, services, and wholesale and retail sectors, while construction activity remained weak despite signs of stabilization.

Job creation remained positive across sectors, although April saw the slowest employment growth since August 2024.

“The employment component remained elevated in April, indicating further strong jobs growth. That said, there was evidence that the recent labor market boom was easing, with the rate of job creation down at an eight-month low,” Balchin said.

Wage growth also slowed to a five-month low but remained among the strongest since the survey’s inception in 2017.

Looking ahead, Qatari businesses maintained optimism for the year ahead, citing growth in real estate, infrastructure development, tourism, and a rising expatriate population as key drivers.


Saudi bank lending hits $827bn in March, fastest growth in over 3.5 years

Saudi bank lending hits $827bn in March, fastest growth in over 3.5 years
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Saudi bank lending hits $827bn in March, fastest growth in over 3.5 years

Saudi bank lending hits $827bn in March, fastest growth in over 3.5 years

RIYADH: Saudi Arabia’s banking sector continued its robust lending expansion in March, with total credit reaching SR3.1 trillion ($827.2 billion), marking a 16.26 percent year-on-year increase. 

According to data from the Saudi Central Bank, also known as SAMA, this represents the highest annual rise in three years and eight months. 

The surge was primarily fueled by corporate lending, which rose from 52.46 percent of total bank credit in March 2024 to 55.19 percent this year. Credit extended to businesses grew by 22.3 percent over this period to exceed SR1.71 trillion. 

This shift underscores how businesses are now the dominant force shaping Saudi Arabia’s lending landscape, signaling the economy’s accelerating diversification.     

Real estate activities continued to lead within the corporate loan mix, comprising 22 percent of business lending and growing by an impressive 40.5 percent year-on-year to reach SR374.5 billion. 

The sector’s continued expansion reflects heightened demand for housing, commercial infrastructure, and new development projects across the Kingdom’s mega-cities and giga-projects under Vision 2030. 

Other key sectors included wholesale and retail trade, which held a 12.43 percent share with SR212.8 billion in lending. Manufacturing accounted for 11.05 percent, with SR189.18 billion in loans. The electricity, gas, and water supply sector comprised 10.6 percent, with loans totaling SR181.43 billion. 

Each of these areas benefited from increased public and private sector spending and reforms targeting industrial growth and economic resilience. 

Notably, education — while accounting for just 0.55 percent of corporate loans — posted the highest growth rate across all sectors at 44.7 percent, reaching SR9.35 billion. This surge aligns with the Kingdom’s efforts to expand educational access and upgrade academic infrastructure in line with long-term human capital goals. 

Financial and insurance activities also showed strong momentum, expanding 38.41 percent to hit SR161.23 billion, ranking third in growth after real estate and education. The rise reflects increased demand for financial services, greater insurance penetration, and fintech integration across key economic sectors. 

Meanwhile, retail lending stood at SR1.39 trillion in March, growing 9.6 percent year on year. However, its share of total credit declined from 47.54 percent in March 2024 to 44.81 percent this year, reflecting a gradual shift in the banking sector’s focus from consumer finance to business-driven growth. 

This moderation in retail lending share comes despite strong performance in personal loans, auto finance, and housing credit, indicating that corporate and commercial financing now command greater attention from lenders responding to market trends and government priorities.   

Improved lending quality 

According to an April 2025 report by McKinsey & Company, the quality of lending in Saudi Arabia has improved across nearly all major sectors. Based on their analysis of expected credit loss versus lending volume from 2020 to 2023, sectors such as services, finance and insurance, and utilities have shown both increased lending and lower credit risk. 

A key finding in McKinsey’s data is that financial institutions in Saudi Arabia are increasingly diversifying their portfolios toward sectors with lower ECL growth and higher lending volumes. For example, the services and financial sectors have exhibited strong improvements in lending quality, while construction and agriculture continue to show relatively higher risk levels.  

A bubble chart in the report maps lending volume against changes in ECL, revealing that the Saudi banking sector is pivoting toward sectors with improving credit profiles. 

Sectors like manufacturing, trade, electricity, and utilities now dominate lending — not only in volume but also due to their lower risk outlooks. This trend aligns with national efforts to prioritize economic diversification and reduce overexposure to volatile or high-risk sectors. 

In the Gulf Cooperation Council, construction and trade sectors are growing steadily — according to McKinsey — at 5 to 8 percent annually, while real estate is expanding around 8 percent, supported by projects across Saudi Arabia and Qatar. Manufacturing is also gaining traction, bolstered by targeted industrial strategies. 

Meanwhile, emerging industries such as education, finance, and food services are collectively growing at rates of 20 percent or more annually.   

Capital market innovation 

McKinsey also noted that Saudi banks are transitioning from a traditional “originate-to-hold” model to a more agile “originate-to-distribute,” or OTD, model. This shift enables banks to issue loans and then offload risk through tools like loan trading, securitization, and syndicated deals, freeing up capital for further lending. 

In a milestone for Saudi financial markets, 2025 saw the signing of the Kingdom’s first residential mortgage-backed securities. Legal frameworks are being developed to enable more such instruments, providing capital-light financing options and paving the way for a more liquid corporate bond market.   

McKinsey projects that OTD volumes in Saudi Arabia could nearly double by 2030, improving banks’ return on assets and equity through faster lending cycles and increased fee income. This is expected to enhance financial sector efficiency while supporting large-scale projects through innovative funding channels.  

ESG and digital transformation 

The report also highlighted the growing role of environmental, social, and governance standards in shaping Saudi lending. With national sustainability agendas in place, many banks are embedding ESG principles into their credit frameworks, including the issuance of green bonds and sustainability-linked loans. 

At the same time, operational efficiency is improving. Front-office productivity is rising as banks invest in AI-driven analytics, advanced risk modeling, and automation. This not only increases competitiveness but also enables faster, more accurate credit decisions in a dynamic market. 

The combined effect is a more resilient, innovative, and inclusive lending landscape — one that supports diversified economic growth while safeguarding financial stability. 

With credit demand projected to grow by 12 to 14 percent annually through the end of the decade, Saudi banks are expected to maintain strong momentum. 

Still, McKinsey emphasizes that sustained growth will require banks to boost productivity and embrace operational innovation.  

Some banks have already shown improvement, but the corporate and investment banking sector still has room to optimize client service and internal efficiency. 

Currently, front-office productivity varies widely among GCC banks. Coverage teams in lagging institutions spend just 20 percent of their time on client-facing activities, compared to 30 percent among industry leaders. McKinsey projects that future top performers will raise that figure to 40 percent by 2030 — a shift that will require significant investment in AI and internal digitization. 

GCC banks are also closing the gap with global peers in analytics and automation. As these capabilities scale, AI-powered operations are expected to drive faster risk modeling, more responsive lending, and greater agility.  

As the region’s markets mature and international competition intensifies, CIB institutions must evolve to offer more sophisticated solutions — such as capital-light lending, securitization, and structured finance. 

Banks that adapt and build long-term investor relationships will be best positioned to shape the market and capture the most promising opportunities.  


Saudi Arabia’s non-oil sector growth continues in April as PMI hits 55.6 

Saudi Arabia’s non-oil sector growth continues in April as PMI hits 55.6 
Updated 05 May 2025
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Saudi Arabia’s non-oil sector growth continues in April as PMI hits 55.6 

Saudi Arabia’s non-oil sector growth continues in April as PMI hits 55.6 

RIYADH: Saudi Arabia’s non-oil private sector continued to expand in April, with the Riyad Bank Purchasing Managers’ Index reaching 55.6, indicating sustained growth in business activity, a new survey showed.  

According to the latest Riyad Bank Saudi Arabia PMI report compiled by S&P Global, the April reading marked a slight drop from 58.1 in March but remained comfortably above the neutral 50.0 mark that separates expansion from contraction. 

Despite the marginal decline, Saudi Arabia’s PMI for April was still higher than the UAE’s reading of 54.0 and Kuwait’s 54.2. 

Naif Al-Ghaith, chief economist at S&P Global Market Intelligence, said: “As of April 2025, Saudi Arabia’s non-oil economy continues to assert itself as a pivotal component of the nation’s economic landscape.”  

He added: “The diversification efforts have continued to bear fruit, underscoring the Kingdom’s strategic shift away from oil dependency toward a more balanced and sustainable economic framework.”  

The PMI survey signalled a strong increase in employment levels across the non-oil private sector in April. 

The rate of hiring growth accelerated to its joint-fastest pace in ten and a half years, matching the level recorded in October 2023, as companies expanded their staffing capacity in response to rising sales and increased activity. 

As a result, staff cost inflation surged to a record high in April, reversing the slowdown in cost pressures seen in March. 

“Employment in the non-oil private sector has been particularly vibrant. This surge in employment is a response to rising sales and increased business activity, prompting firms to expand staffing capacities,” said Al-Ghaith.  

The report added that business activity at Saudi Arabia’s non-oil companies increased sharply at the start of the second quarter, with firms commonly reporting an expansion in output due to higher sales, new project approvals, and strong tourist numbers. 

“While output growth remains robust, it is somewhat tempered by global economic uncertainties and competitive pressures affecting client spending. Nonetheless, employment figures continue to climb, indicating a sustained growth trend since last May,” added Al-Ghaith.  

He further noted that Saudi Arabia had successfully managed inflation compared to other nations, highlighting the Kingdom’s effective control of domestic prices amid global uncertainties. 

The latest PMI data also signalled a steep increase in purchasing activity, with the growth rate reaching a three-month high. 

S&P Global noted that expectations among non-oil firms for output in one year’s time increased slightly from March, although overall business optimism remained below the long-run survey average. 

Looking ahead, Al-Ghaith said the Kingdom’s fiscal prospects remain positive for 2025. 

“Forecasts suggest a 3 percent expansion in overall gross domestic product and a 4.5 percent increase in non-oil sectors, continuing the upward trajectory in non-oil activities,” said Al-Ghaith.  

He added: “This growth is crucial for sustaining the economic transformation outlined in Vision 2030, which aims to foster diverse, innovative industries.” 


Oil Updates — crude tumbles as OPEC+ accelerates output hikes, surplus looms

Oil Updates — crude tumbles as OPEC+ accelerates output hikes, surplus looms
Updated 05 May 2025
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Oil Updates — crude tumbles as OPEC+ accelerates output hikes, surplus looms

Oil Updates — crude tumbles as OPEC+ accelerates output hikes, surplus looms

SINGAPORE: Oil prices fell more than $1 a barrel on Monday as OPEC+ is set to further speed up oil output hikes, spurring concerns about more supply coming into a market clouded by an uncertain demand outlook, according to Reuters.

Brent crude futures dropped $1.34, or 2.19 percent, to $59.95 a barrel by 10:17 a.m. Saudi time while US West Texas Intermediate crude was at $56.87 a barrel, down $1.42, or 2.44 percent.

Both contracts touched their lowest since April 9 at Monday’s open after OPEC+ agreed to accelerate oil production hikes for a second consecutive month, raising output in June by 411,000 barrels per day.

The June increase from the eight producers in the OPEC+ group will take the total combined hikes for April, May and June to 960,000 bpd, representing a 44 percent unwinding of the 2.2 million bpd of various cuts agreed on since 2022, according to Reuters calculations.

“The May 3 OPEC+ decision to raise production quotas another 411,000 bpd for June adds to the market expectation that the global supply/demand balance is moving to a surplus,” Tim Evans, founder of Evans on Energy said in a note.

The premium between the front-month Brent contract and that for delivery in six months was 4 cents a barrel, narrowing from 47 cents in the previous session.

However, the spread flipped to a discount, known as a contango structure, of 11 cents a barrel earlier on Monday, for the first time since December 2023, reflecting expectations that the later-dated market is amply supplied or demand may drop.

Barclays and ING have also lowered their Brent crude forecasts following the OPEC+ decision.

Barclays reduced its Brent forecast by $4 to $66 a barrel for 2025 and by $2 to $60 for 2026, while ING expects Brent to average $65 this year, down from $70 previously.

“We now expect OPEC+ to phase out the additional voluntary adjustments by October 2025 but also expect slightly slower US oil output growth,” Barclays analyst Amarpreet Singh said in a note.

The net impact of the higher OPEC+ output and lower US output has increased Barclays’ estimate of supply in 2025 by 290,000 bpd for 2025 and 110,000 bpd for 2026, he said.

ING analysts led by Warren Patterson said the global oil balance is expected to move deeper into surplus throughout 2025.

“The oil market has been dealing with significant demand uncertainty amid tariff risks. This change in OPEC+ policy adds to uncertainty on the supply side,” they added.


Trump says he wants a fair trade deal with China 

Trump says he wants a fair trade deal with China 
Updated 05 May 2025
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Trump says he wants a fair trade deal with China 

Trump says he wants a fair trade deal with China 

ABOARD AIR FORCE ONE: US President Donald Trump on Sunday said the US was meeting with many countries, including China, on trade deals, and his main priority with China was to secure a fair trade deal. 

Trump told reporters aboard Air Force One that he had no plans to speak with Chinese President Xi Jinping this week, but US officials were speaking with Chinese officials about a variety of different things. 

Asked if any trade agreements would be announced this week, Trump said that could “very well be” but gave no details. 

Trump’s top officials have engaged in a flurry of meetings with trading partners since the president on April 2 imposed a 10 percent tariff on most countries, along with higher tariff rates for many trading partners that were then suspended for 90 days. 

He has also imposed 25 percent tariffs on autos, steel and aluminum, 25 percent tariffs on Canada and Mexico, and 145 percent tariffs on China. 

He suggested that he did not expect to reach an agreement with some countries, but could instead be “setting a certain tariff” for those trading partners in the next two to three weeks. It was not immediately clear if he was referring to the reciprocal tariffs announced on April 2, which are due to kick in on July 8 after a 90-day pause. 

Trump repeated his claim that China had been “ripping us for many years” on global trade, adding that former President Richard Nixon’s move to reach out and establish relations with China was “the worst thing” he ever did. 

Trump sounded more upbeat about China and the prospects for reaching an agreement in an interview with NBC News that was taped on Friday and broadcast on Sunday. 

In the interview, he acknowledged that he had been “very tough with China,” essentially cutting off trade between the world’s top two economies, but said Beijing now wanted to reach an agreement. 

“We’ve gone cold turkey,” he said. “That means we’re not losing a trillion dollars ... because we’re not doing business with them right now. And they want to make a deal. They want to make a deal very badly. We’ll see how that all turns out, but it’s got to be a fair deal.”