After years of cheap credit and willing investors, private equity in the Middle East and North Africa (MENA) region now faces a challenging period. International banks are frantically deleveraging and plummeting stock markets are blocking the exits for fully invested and mature funds. At the same time, investors are shying away from illiquid asset classes.
Yet experts from Wharton and Amwal AlKhaleej, a leading MENA-focused private equity house headquartered in Saudi Arabia, say that regionally oriented private equity funds that have capital to invest, adapt to the new realities, and follow a MENA-compatible strategy are likely to do well in the future. In fact, the credit crunch could even end up giving a boost in the long term to Middle East private funds with the right model. Moreover, despite the many challenges unleashed in 2008, the region’s economies on balance are likely to fare better than any other region in the world going forward.