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Venturing Forth: prospects for the Private Equity and Venture Capital market in the Middle East

August 3, 2021  (Dubai)

In an interview by MEA Finance Magazine, Greenstone Equity Partners’ Chairman, CEO and Founder Alex Gemici, paints a detailed picture of the prospects for the Private Equity and Venture Capital market in the Middle East.  Highlights from the interview include:

Commenting on the expectation that Private Equity firms to become more involved in M&A in the region, Alex Gemici said:

“In Q2 2021, global PE and VC buyout deals doubled to just over 1,000 compared to Q1 2021. There is considerable pent-up demand for M&A and consolidation persists, particularly in the UAE, Saudi Arabia, Qatar, Kuwait and Egypt. Through the first half of 2021, the total value of mergers and acquisitions in MENA reached $44.8 billion.  While there is movement, there is still room for more activity. Major sectors in need of consolidation include financial services (banks), healthcare (clinics, hospitals, pharmacies), real estate and hospitality (hotels, restaurants etc.), as well as covid-impacted industries. There are also a number of potential opportunities currently available in the market including in cybersecurity, distribution and construction sectors. Greenstone Equity Partners is also seeing increased interest in infrastructure both from fund managers looking to raise capital from the region and local investors looking to deploy capital into sustainable projects. We expect this trend to continue over the next five years.”

On if SPACs (Special Purpose Acquisition Companies) competition or an opportunity for Private Equity,  Alex Gemici was quoted:

“Special Purpose Acquisition Companies, also known as blank check companies, are not new – they were invented in 1993. For many reasons, the SPAC structure languished for the first 25 years in its existence and then exploded into the market in 2020 with unexpected veracity. SPACs raised $45 billion between 1993 and 2019. In 2020 alone, the number jumped to $65 billion and during the first six months of this year, an additional $115 billion were raised by SPACs. According to SPAC Analytics, compared to the traditional IPOs, SPACs went from less than 1% of the IPO market in 2003 to 55% in 2020 and 65% of the IPO market this year. The SPAC speculation hit a level in the first quarter of this year where global PE firms from TPG and Riverstone to even Softbank have started their own SPACs with primarily retail investor funds, as opposed to their own funds’ investor capital. The viability of SPACs is open for debate and the post-acquisition stock price gains and losses will dictate if SPACs are here to stay or a short-term fad.”

Read the full interview in the August 2021 issue of MEA Finance Magazine:  MEA Finance Magazine

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