Private equity investments in the Middle East and North Africa (MENA) region reached $5.9 billion during the first half of 2024, according to the latest report by PitchBook. This figure is equivalent to around 38 percent of the total deal value in 2023.
In recent years, the MENA region witnessed a surge in private equity investment as investors sought to expand their presence in the growing market. “However, 2024 is off to a slow start as investors take a cautious approach amid volatile oil prices and geopolitical tension,” PitchBook noted.
Deal count to decline
Since 2020, private equity deal value has remained above $10 billion, supported by mega deals. The report noted that the deal count seemed to have peaked for two consecutive years at 159 deals in both 2022 and 2023. With only 49 transactions in H1 this year, the total deal count is likely to come in well under last year’s total.
The most active private equity firm in the MENA region since 2018 has been Tunisia-based investment house Africinvest, which has completed 16 deals during that period.
Education and healthcare emerge as key areas
Despite the downward trend, the sector is seeing growth in multiple sectors. Education and healthcare remain the key areas for private investments in the Middle East. The MENA region’s biggest private equity deals in the first half included CVC Capital Partners’ $3.3 billion sale of Dubai-based private schools provider GEMS Education to Brookfield and Gulf Islamic‘s $164 million investments in Saudi-based healthcare services provider Abeer Group.
MENA countries have been placing significant focus on improving healthcare. In the UAE, there are currently around 700 healthcare projects under development with around $61 billion worth of investment. A large share of investments is coming from the private sector. Meanwhile, Saudi Arabia is planning to invest at least $65 billion in its healthcare infrastructure, including providing 20,000 new hospital beds and 224 healthcare centers.
In addition, Oman has recently built its first medical city and the GCC countries are increasingly introducing mandatory health insurance policies which will boost healthcare demand.
Read: Visa responds to challenges and opportunities in Saudi Arabia’s growing tourism sector
Private market funds to edge lower
Looking at the broader fundraising climate in H1, private market funds in MENA — including venture capital, private equity, debt, real assets, and secondaries — raised $9.4 billion. This number suggests that the year’s total may come in below the $35.3 billion the region raised during 2023.
The World Bank is forecasting a modest rate of 2.7 percent growth across the MENA region in 2024, up from 1.9 percent in 2023. However, investors are expected to remain cautious with potential trade sanctions and the conflict between Pakistan and Israel remaining major headwinds in the region.
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