MIDDLE EAST INVESTMENT OPPORTUNITES FOR PRIVATE EQUITY

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  • GENUINE BANK GUARANTEE (BG) AND STANDBY LETTER OF CREDIT (SBLC) FOR LEASE AT THE LOWEST RATES AVAILABLE. OTHER FINANCIAL INSTRUMENTS SUCH AS MTN, CD, DLC, PB ARE ALSO AVAILABLE. We offer certifiable and verifiable BANK instruments via Swift Transmission from a genuine provider capable of taking up time bound transactions. Email: gudipati101@gmail.com Skype: gudipati.harikishan Email me for procedure and terms
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  • NOTE FOR THOSE WHO NEED 100% LOAN TO FINANCE THEIR PROJECT/COMMERCE.I am business consultant based in Asia, we have  new lenders that are offering 100% financing for projects of minimum $10 million- maximum $500 million. They can do this in all 50 USA states, Europe, Asia and Gulf  countries . If you have a project that is $10 million and higher and you want funding for your project, send me an email with the Executive Summary of that project and I will review it then contact you as soon as possible.Most clients who come to us for this kind of funding already have anywhere from 5-30% into the project. The main things that we look for are: FIRST, does the principal(s) have experience in this field? Second, what is the financial strength of the client (and/or their LLC)? Third, what is the strength of the actual deal? If we can get past those 3 things, there is a very good chance that we will fund your project. Let me tell you what we don't want: someone who comes to us and says that they want to buy a $30 million hotel and they have no money and no experience. Now, you may be laughing to yourself or scratching your head thinking: do people actually do this? The answer: YES!!! We don't work with "pipe-dreamers". We work with people who have a very solid plan and who have "moderate to strong" financials. For confidential consideration, PRINCIPALS please send a copy of your Executive Summary to me; ahmadelmalik1@gmail.com
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MIDDLE EAST INVESTMENT OPPORTUNITES FOR PRIVATE EQUITY

  1. 1. DISCUSSION PAPER ON MIDDLE EAST OPPORTUNITIES
  2. 2. Global private equity firms have historically ignored the region with the MENA region only accounting for 0.1% of the US$ 2.3 trillion* PE industry PRIVATE EQUITY FUND DISTRIBUTION Americas 72.1% Europe 22.2% Asia 4.3% Oceana 0.7% South Asia 0.3% MENA 0.1% Africa 0.2% *US$ 400 billion of the global PE industry, including leverage represents a US$ 2 trillion in potential buying power Source: Thomson One Banker, Fortune Magazine Regional PE industry as a % of total PE industry of US$ 2.2 trillion
  3. 3. MENA GDP OVERVIEW <ul><li>With real GDP growth in most countries exceeding 5%, the regional economies are amongst the fastest growing in the world </li></ul><ul><li>Real GDP growth is expected to increase at more than twice the rate of population growth leading to an accelerated growth in living standards across the region </li></ul>Comments Real GDP Growth Average 2007 % Nominal GDP US$ Billion 2007 Qatar Saudi Arabia Egypt Bahrain Oman UAE Kuwait Morocco Jordan Lebanon Population Size
  4. 4. MENA REGION POSITIVE OUTLOOK <ul><li>Continued development of banking system and creation of an independent monetary policy has sustained the growth on real GDP in Middle East. </li></ul><ul><li>The value of oil exports in 2007 reached almost 700 Billion USD. </li></ul><ul><li>The non oil GDP also grew by 7.25% contributing to the overall growth. </li></ul><ul><li>With the positive outlook on the economies with increase diversification from oil the future forecasts looks strong for the middle east countries. </li></ul>
  5. 5. POPULATION GROWTH <ul><li>Direct correlation between infrastructure requirements and population size </li></ul><ul><li>Need for additional job creation </li></ul>ECONOMIC GROWTH <ul><li>Economic growth could be stunted if hard and industrial infrastructure is ignored </li></ul>ECONOMIC DIVERSIFICATION <ul><li>MENA region governments are in process of gradually reducing dependence on oil and gas </li></ul>COMPARATIVE INDUSTRIAL ADVANTAGE <ul><li>Intrinsic value stemming from low energy and feedstock costs, abundant natural resources and cheap labour </li></ul>DEMOGRAPHIC CHANGE <ul><li>Leading to increasing demand for education and healthcare services </li></ul>CHRONIC UNDER-INVESTMENT <ul><li>Low starting point </li></ul>FACTORS DRIVING REQUIREMENT FOR INVESTMENT
  6. 6. THE INVESTMENT DRIVERS OF MIDDLE EAST REGION INFRASTRUCTURE INVESTMENT REQUIREMENTS <ul><li>The Middle East has become the largest project finance market in the world, accounting for US$ 33 billion, or one dollar in every three, that was raised for global infrastructure projects in the first half of 2007. </li></ul><ul><li>In Middle East in particular an excess of US$ 630 billion of infrastructure investment required across a broad range of sectors over the next 5-10 years. </li></ul>SECTOR LIBERALIZATION & PRIVATIZATION REGULATORY RESTRUCTURING <ul><li>There is a paradigm shift in the mindset of regional governments to promote the privatization of state-owned enterprises, with a pipeline across MENA in excess of US$ 1 trillion within the next decade. </li></ul><ul><li>The improvement in regulatory infrastructure and the implementation of WTO commitments are likely to fuel the need for more investments. </li></ul>
  7. 7. Gradual liberalization of regulations are conducive to economic growth, yet more efforts are required to create a favorable environment FAVOURABLE REGULATIONS IN MENA REGION FOREIGN OWNERSHIP CUSTOMS CLEARANCE INTELECTUAL PROPERTY RIGHTS LABOR LAWS DISPUTE SETTLEMENT FDI INFLOW Unfavorable Favorable Gradual liberalization of regulations and the impact on Economy
  8. 8. UAE Oman Qatar Bahrain Saudi Jordan Tunisia Morocco Lebanon Yemen Algeria Egypt Qatar Tunisia UAE Oman Jordan Morocco Bahrain Egypt Algeria Yemen Saudi Lebanon OPENNESS OF CUSTOMS REGIME EFFICIENCY OF LEGAL FRAMEWORKS Qatar Tunisia UAE Oman Jordan Morocco Bahrain Egypt Algeria Yemen Saudi Lebanon ORGANIZED EFFORTS TO IMPROVE COMPETITIVENESS 1= WEAK 7= STRONG MENA REGION –INVESTMENT INDICATORS UAE attracted 58% of all regional FDI projects
  9. 9. There are approximately 60 PE firms in the Middle East today, primarily concentrated in the UAE… <ul><li>UAE: </li></ul><ul><li>Abraaj Capital </li></ul><ul><li>Abu Dhbai Investment Capital </li></ul><ul><li>Dubai International Capital </li></ul><ul><li>Emirates Investment and Development PSC </li></ul><ul><li>Delta Capital </li></ul><ul><li>East Gate Capital Group </li></ul><ul><li>Injazat Tech. Fund </li></ul><ul><li>Ithmar Capital </li></ul><ul><li>Shuaa Capital </li></ul><ul><li>The GCC Energy Fund Managers </li></ul><ul><li>Isthitmaar </li></ul><ul><li>The National Investor </li></ul><ul><li>HSBC Private Equity </li></ul><ul><li>Gulf Capital </li></ul><ul><li>The Group </li></ul><ul><li>SW Source Capital </li></ul><ul><li>Scimitar Ventures </li></ul><ul><li>MFA (Dib) </li></ul><ul><li>Evolvence </li></ul><ul><li>Lebanon: </li></ul><ul><li>Middle East Capital Group </li></ul><ul><li>Capital Trust Group </li></ul><ul><li>Byblos Bank </li></ul><ul><li>Tunisia: </li></ul><ul><li>Tuninvest </li></ul><ul><li>Swicorp </li></ul><ul><li>Egypt: </li></ul><ul><li>Citadel Capital </li></ul><ul><li>EFG Hermes </li></ul><ul><li>Gulf Arab Investment Co. </li></ul><ul><li>Oasis Capital </li></ul><ul><li>Concord capital </li></ul><ul><li>Jordan: </li></ul><ul><li>Foursan Group </li></ul><ul><li>The Jordan Fund </li></ul><ul><li>Kuwait: </li></ul><ul><li>Kamco </li></ul><ul><li>Global Investment House </li></ul><ul><li>Kuwait Financial Center </li></ul><ul><li>NBK Capital </li></ul><ul><li>Bahrain: </li></ul><ul><li>Emerging Markets Partnership </li></ul><ul><li>Gulf Finance House </li></ul><ul><li>Merchant Bridge Group </li></ul><ul><li>Ascent Group </li></ul><ul><li>Arcapita </li></ul><ul><li>Gulf One </li></ul><ul><li>Investcorp </li></ul><ul><li>Venture Capital Bank </li></ul><ul><li>Saudi: </li></ul><ul><li>Amwal Al Khaleej </li></ul><ul><li>Athar Al Majid Hold. </li></ul><ul><li>Swicorp </li></ul><ul><li>Morocco: </li></ul><ul><li>ATLAMED SA </li></ul>
  10. 10. MIDDLE EAST DRIVERS OF THE PRIVATE EQUITY INDUSTRY Macroeconomic Conditions <ul><li>Stable economic growth and macroeconomic environment </li></ul>Description <ul><li>The Region has witnessed impressive growth rates despite unstable political environments in some countries </li></ul>Regional Perspective Regulatory & Economic Restructuring <ul><li>Improvement in regulatory infrastructure and shift in economic policies caused by privatizations, globalization and efficient deployment of capital </li></ul><ul><li>Improving regulatory environment in most countries with competition to attract capital </li></ul><ul><li>Economic liberalization under way in a number of countries and family businesses undergoing generational change </li></ul>Availability of Capital <ul><li>Financial institutions and pension funds providing capital </li></ul><ul><li>Increased appetite of local investors turned to regional investment opportunities </li></ul>Exit mechanism <ul><li>Availability of exit routes either through trade sales or IPOs </li></ul><ul><li>Increasing IPO and M&A activity, as well as impressive performance of stock markets </li></ul><ul><li>Governments getting into governance and out of management </li></ul><ul><li>New exchanges like DIFX launched </li></ul>
  11. 11. MIDDLE EAST PRIVATE EQUITY GROWTH Total Funds Announced, Fund Raising, Investing and Rumored in MENA – 1994 onwards US$ million, 2002 – March 2007
  12. 12. MENA PE FUND GROWTH <ul><li>KEY TRENDS </li></ul><ul><li>60 Private Equity Currently </li></ul><ul><li>Accelerating Growth -140% 2007 Vs 63% In 2006 </li></ul><ul><li>Infrastructure A Key Theme For Which 50% Of Funds Are Raised </li></ul><ul><li>Average Fund Size US$ 140 Mn To US$ 440mn </li></ul>CAGR 49% CAGR 63% CAGR 139%
  13. 13. MIDDLE EAST INFRASTRUCTURE INVESTMENT OPPORTUNITIES MENA INFRASTRUCTURE INVESTMENT REQUIREMENTS 630 US$ BILLION
  14. 14. MENA HEALTHCARE SECTOR The sector has grown rapidly over the last decade. It currently accounts for nearly 6 percent of the Dubai non-oil gross domestic product. The sector is predicted to grow by 14% over the coming 5 years.
  15. 15. MENA POWER SECTOR INVESTMENT REQUIREMENTS HISTORICAL CAPACITY FORECAST CAPACITY 25% EXCCESS CAPACITY 35% CAPACITY SHORTFALL GCC CAPACITY AND PEAK DEMAND FORECAST (MW) DEMAND <ul><li>The increasing population in the middle east and the growing infrastructure facilities in middle east has push the demand for power sector. </li></ul><ul><li>It is forecasted that by 2010 the there would be a 35% shortfall In the power capacity and power sector provides ample investment opportunities in the region </li></ul>
  16. 16. MIDDLE EAST TRANSPORT INVESTMENT OPPORTUNITY US$BIL <ul><li>Expenditure on GCC and middle east has been low in comparison with the global peers. </li></ul><ul><li>With an increasing population and rapidly expanding business and tourism Sector the governments are under increasing pressure to provide strong infrastructure in all areas. </li></ul><ul><li>UAE and Saudi are in process of setting up a rail networks are increasing the investment opportunities in the rail and road networks through private participation. </li></ul>
  17. 17. MENA PRIVATE EDUCATION SECTOR 1. The Estimated size of MENA market is @ US 114 Billion by 2015. 2. The MENA region is set to achieve a world’s highest higher education admission level. 3. The growth going forward will be witnesses in the private sector growth in the higher education
  18. 18. MIDDLE EAST PETROCHEMICAL SECTOR <ul><li>The investment in petrochemical market in MENASA is estimated to be US$ 33 billion </li></ul><ul><li>The rapid growing Petrochemical sector in the Middle East is due to various Factors including </li></ul><ul><li>Competitively priced Feedstock </li></ul><ul><li>The largest crude oil 62% and natural Gas 41% reserves in the world. </li></ul><ul><li>Strong political support to build a competitive export based industry and </li></ul><ul><li>Central geographic location with access to high growth market. </li></ul>6% 9% 17% The new capacity expected is 33% of global capacity
  19. 19. MIDDLE EAST MINING SECTOR <ul><li>Saudi Arabia, Morocco, Jordan & United Arab Emirates and Oman have abundant resources. </li></ul><ul><li>Middle east is pursuing private investment in the mining sector to reduce the reliance on imports. </li></ul><ul><li>It is so far licensed 1,100 mining projects, which have realized revenues of US$3.1 billion to date . </li></ul><ul><li>Phosphate reserves identified in Saudi Arabia is estimated to be 3.1 Billion tons making it the worlds largest source of phosphate in the world. </li></ul><ul><li>Aluminum is a important metal for the region. GCC producers are gearing up for five fold increase in aluminum production as GCC prepares to lead the global industry into a new era. </li></ul>BASE AND CAPACITY CREEP NEW PRODUCTION DEMAND GLOBAL ALUMINUM DEMAND SUPPLY OUTLOOK MIL TONS
  20. 20. US$ 325 billion of private investment required over next 5 years Even with large budget surpluses in the GCC for example, there is still a large deficit in required financing. GCC PROJECTS (US$ BILLION) The Saudi Arabian government requires investments of US$ 624 billion over the next 15 years ESTIMATED PUBLIC VS PRIVATE FUNDING IN THE GCC UAE Saudi Arabia Qatar Oman Kuwait Bahrain Total Projects Excess Oil Rev. 272 200 113 32 81 25 723 398 Qatar 272 200 113 32 81 25 723 398
  21. 21. FACTORS DRIVING THE NEED FOR FACTORS FAVOURING PRIVATE INVESTMENT NON PERFORMING LOANS AS % OF TOTAL LOANS LACKING CORPORATE GOVERNANCE LOW LABOR PRODUCTIVITY INEFFICIENT CAPITAL STRUCTURES EAST ASIA E.EUROPE &C.ASIA LATIN AMERICA MENA OECD SOUTH ASIA SUB SAH AFRICA PUBLIC ACCOUNTABILITY 0.20 0.37 0.77 -0.78 1.89 -0.29 -0.41 INSTITUTIONAL ACCOUNTABILITY -0.11 -0.16 -0.09 -0.32 1.38 -0.41 -0.66
  22. 22. FURTHER PRIVATISATION OPPORTUNITIES SNAP SHOT COUNTRY KEY SELECTED AREAS ANNOUNCED PIPELINE NO. OF TRANSACTIONS UAE POWER WATER OIL AND GAS TRANSPORTATION AND PORTS 28 KUWAIT FINANCIAL SERVICES FOOD AND BEVERAGE LOGISTICS ENGINEERING 23 OMAN FINANCIAL SERVICES TELECOMMUNICATIONS POWER TRANSPORTATION AND PORTS 6 SAUDI ARABIA POWER TELECOMMUNICATION TRANSPORTATION AND PORTS OIL AND GAS 8 JORDAN POWER TRANSPORTATION AND PORTS TELECOMMUNICATIONS OIL AND GAS 13 EGYPT FINANCIAL SERVICES TRANSPORTATION AND PORTS TELECOMMUNICATIONS OIL AND GAS 92 PAKSITAN FINANCIAL SERVICES TRANSPORTATION AND PORTS FOOD AND BEVERAGE HEALTHCARE 63 INDIA TRANSPORTATION AND PORTS POWER TELECOMMNUNICATIONS NATURAL RESOURCE 13
  23. 23. Thanks and Questions Source of Information 1. Abraaj Capital presentation ; 2. E&Y Global Website 3. Google and Yahoo search sites

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