Dubai:The total $744 million funds raised in 2013 compared to $863 million in 2012, a decline of 14% in the private equity sector in the MENA, according to a report.
However, the report added, average close per fund increased to $74 million in 2013 compared to $43 million in 2012, reflecting the consolidation trend among funds where fewer funds are able to raise bigger amounts.
Fundraising community in the MENA region remains optimistic to close the funds announced in 2013 worth $2.6 billion. The private equity industry in the MENA region has demonstrated flat performance during 2013.
Based on disclosed information, the report added, the number and total value has seen a slight decrease compared to 2012.
“The fundraising environment remained challenging with a decrease in total funds raised during 2013 compared to prior year. This is attributed to the consolidation of the private equity industry and the unrest in the region.”
This was the crux of the report published by the MENA Private Equity Association, a non-profit organisation supporting and developing the private equity and venture capital industry in the Middle East and North Africa. The report was eighth MENA Private Equity and Venture Capital Annual Report.
The Report, which was compiled in collaboration with KPMG and Zawya Thomson Reuters, presented a detailed review of the private equity and venture capital arena in light of the uncertainty and continued challenging environment across the region.
“The private equity activity in 2013 continued to be impacted by the sequence of the crises in the region starting with 2008 and until today. Nevertheless, the fact that the industry can still raise and successfully invest hundreds of millions every year is a testimony of resilience of the industry in an adverse environment. I am optimistic that 2014 will reflect a healthier level of activity as witnessed by the amount of funds closed, investments made, and exits realized in the first half of 2014,” Imad Ghandour, Managing Director at CedarBridge Partners and a member of the Association’s Steering Committee, said.
“The 2013 continued to be a challenging year for the PE and VC industries in the region. Whilst the industry in general continued to invest cautiously favouring the non-cyclical and defensive sectors, such as oil and gas and healthcare, investors are increasingly broadening their focus across a range of sectors including food and beverage and leisure and tourism – the two largest sectors of investment by value during 2013,” Vikas Papriwal, Partner and UAE Country Head for Private Equity and Sovereign Wealth Funds at KPMG, said.