The sum of private equity and venture capital deals in the Middle East and North Africa rose last year but the total deal value fell.
There were 244 disclosed transactions in 2016, the highest number in any year since 2008, according to the eleventh annual report by the MENA Private Equity Association. This included 69 private equity deals, up from 53 in 2015, and 175 venture capital deals, up from 122.
However the total deal value, at $1.1 billion, was down a quarter compared with the previous year, a result the report authors blamed on a decline in the number of high-value private equity deals. It was the second yearly decline following 2014, when an estimated $1.5 billion of deals were done.
“Investment activity was notably concentrated in the UAE in 2016,” said the report. “This reflects a perceived flight to safety as the largest alternative markets of Egypt and Saudi Arabia experienced a variety of challenges.”
The report warns its results are not comprehensive because an estimated 30% of private equity and venture capital transactions in the region are not announced.
“As in prior years, there is a lack of visibility over the funding structures used by fund managers to effect transactions and therefore investment values reflect total transaction size rather than equity investment,” it said.
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