Gulf private equity behemoth looking to add staff
So, the golden age of private equity in the Gulf has begun to look a little less shiny this year. However, with Dubai hosting a big industry conference this week, just about everyone is keen to point out that it is, in fact, pretty buoyant. And Abraaj Capital's expansion plans are a welcome reminder of this.
The Gulf's biggest private equity player, seemingly faced with a dearth of investment opportunities could have shrunk into the shadows, but instead it plans to add staff in both new and traditional locations.
"The company is expanding, both in its home base Dubai and abroad where it operates four offices," says Frederic Sicre, executive director of Abraaj Capital.
"We are looking to add staff in Pakistan and Egypt as its investments there deepen and multiply. Abu Dhabi and India are also on the radar although there are no precise plans at this time."
And the current problems affecting private equity in the Gulf - a slow down in the number of deals and the potential closure of smaller players - are just a blip and the region still offers great potential, reckon industry insiders gathering at a conference in Dubai.
Stephen Murphy, managing director of Cairo-based private equity firm Citadel Capital, says that the $8bn committed to the Middle East and Africa last year was a drop in the ocean of the $58bn invested in emerging markets as a whole. This, he says, means the region is still playing catch-up.
Abraaj says it sees "large investment opportunities" in Middle East infrastructure projects, healthcare, education and pharmaceuticals sectors.
Still, management consultancy Bain & Company says that it's going to be increasingly difficult for Middle East private equity firms to raise capital in the current climate and that they should instead focus on their existing portfolio companies.
"The key to maintaining returns is portfolio value creation," says Dr. Jochen Duelli, head of Bain's Middle East private equity practice. "In the current environment, it is no longer enough in this region to simply rely on rising valuations and dynamic economic growth."
