According to a report by Kuwait-based Global Investment House, titled “Private Equity in the MENA Region”, the spending power of the region’s growing middle class is influencing a shift in investment focus away from oil & gas to service-based and consumer-oriented businesses.
During the period from 2007 till H1-2008, investments made were highest in the Basic Materials sector with a total of US$1,422mn worth investments. It was followed by Healthcare sector (11% of all investments) followed by Financial Services (11%), Transport (8%), Oil and Gas (7%) and Services (5%) sectors.
Basic materials sector was again influenced by the US$1.4bn investment in Egyptian Fertilizers Company.
As the economies and population of the region will grow, social infrastructure needs in healthcare and education will increase and these will be the sectors that private equity players would look for.
The Telecoms and IT sector got only 1% of all investments in the period from 2007 till H1-2008, of which I’m sure only a tiny fraction made it to internet and technology startups.