Middle East fundraising passes ‘inflection point’

More private equity capital was raised in the first quarter of 2010 than throughout the whole of 2009, according to a GVCA report.

The amount of money raised by private equity firms in the Middle East and North Africa (MENA) region during the first quarter of 2010 was 18 percent more than the total amount raised during the whole of 2009.

Private equity firms throughout the region as a whole raised just $1.06 billion during 2009 compared with $1.25 billion raised during Q1 2010, according to the Gulf Venture Capital Association (GVCA) annual report.

Just six funds were raised during 2009, only two of which made it to a first close.

Commenting in the report, managing director of Abraaj Capital Mustafa Abdel Wadood called the last 18 months “momentous” for private equity in MENA, but expressed optimism as the industry passes an “inflection point” in its evolution.

Abdel Wadood added that the period of the financial crisis had reshaped the industry landscape and will lead it into a process of maturation: “Following an unprecedented boom when new fund announcements seemed to spring up at near-weekly intervals, the turbulence of the past two years has been a tough test that clearly highlighted the gap between the industry’s leaders and weaker performers”, he said.

In the same report, Nasser Saidi from the Hawkamah Institute for Corporate Governance noted that governance in the region is expected to improve, with his organisation working with the UNPRI in drafting corporate governance guidelines for the region.