Private equity activity in Saudi Arabia continued to surpass the billion-dollar mark in 2024, accumulating $2.8 billion in investment value across 15 transactions. Following three years of consecutive growth in investment value and number of transactions and reaching a peak in 2023, total PE investment contracted by 27 percent annually, while transaction volume fell by 60 percent in 2024.
According to MAGNiTT’s latest report, the slowdown suggests increased selectivity among private equity firms, favoring higher-quality deals over volume. While the decline may signal a cooling period, it also indicates a market recalibration, setting the stage for more sustainable long-term growth.
“Saudi Arabia’s private capital market continues to evolve as it’s undergoing a dynamic transformation to become one of the key pillars of the Kingdom’s investment landscape, driving capital deployment, business expansion, and economic diversification. Over the past years, private equity has further strengthened its role in accelerating growth across strategic industries, aligning with Saudi Vision 2030 and the nation’s ambitions,” stated Nora Alsarhan, Deputy CEO and CIO, SVC.
Growth-stage investments grow
Private equity growth transactions emerged as the dominant strategy, signaling a shift in investor focus. Growth-stage investments, which are defined as minority interest investments in a well-established company with the aim of accelerating its growth, accounted for 67 percent of total transactions in 2024, up from 43 percent in 2023.
MAGNiTT attributed this shift to investors favoring scalable mid-market opportunities. Despite their volume, these deals represented only 18 percent of total private equity investment in Saudi Arabia. Meanwhile, Buyout transactions dropped 76 percent in volume and 39 percent in value, marking a significant contraction in control-oriented deals.
Last year, Saudi Arabia’s private equity deals above the $200 million mark doubled their share from 14 percent in 2023 to 24 percent in 2024. Mid-market transactions gained traction as investors recalibrated their risk appetite. This shift suggests growing investor interest in mid-market opportunities, complementing the sustained growth of large-scale deals over $200 million.
“The region’s private equity sector is in the midst of transformative change. In recent years, we have witnessed significant growth in the quantity and quality of deal flow, driven by the strong economic momentum in Saudi Arabia and the GCC, increased interest by GCC companies to enter the Saudi market, and growing visibility of private equity investors in the region,” stated Tariq Al-Sudairy, managing director and CEO, Jawda Investment.
Telecom and communications sector attracts highest capital
Saudi Arabia’s telecom and communications sector attracted the highest private equity capital in 2024. A major buyout in the telecom sector last year positioned it as the top industry for investment value. In second place came sustainability, driven by a single private equity growth transaction, while healthcare drew capital through both buyout and growth equity deals.
Private equity growth transactions dominated healthcare allocations, accounting for the majority of the sector’s total investment.
The top five industries, including F&B, healthcare, financial services, transport and logistics and education, accounted for 73 percent of total private equity transaction volume in Saudi Arabia last year, compared to 60 percent in the period between 2019 and 2023.
Private equity growth transactions also saw a notable uptick, comprising 47 percent of transactions within these industries, signaling a diversification in investment strategies.
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Institutional investor participation declines
The report also revealed that institutional investor participation narrowed, reinforcing a more concentrated capital pool, with the number of active private equity investors declining from 19 in 2023 to 13 in 2024.
PIF and TVM executed multiple transactions, underscoring their role as key institutional players shaping Saudi Arabia’s private equity landscape. Strategic partnerships and institutional commitments also continued to bolster Saudi Arabia’s private equity ecosystem last year.
