Record amounts of liquidity have been flowing into the GCC region in the past three years, adding to the already high levels of wealth built up from past oil booms, Menafin has reported.
This is encouraging many private equity firms to enter the region, mobilize this wealth and invest it in the region’s growing investment and economic opportunities. Not only local and regional firms, but also major global private equity firms are setting up shop in the GCC to share in this pie.
According to the Private Equity Intelligence, a London-based tracking firm, there were more than 6,000 private equity funds around the world with assets totaling $1.4 trillion in 2005. In 2006, 684 new funds were launched that raised another $432 billion of new funds for investment.
The vast majority of the new funds were buyout funds ($212 billion), followed by real estate funds ($63 billion), venture funds ($44 billion), fund of funds ($31 billion), mezzanine funds ($19 billion), infrastructure funds ($12 billion) and distressed debt funds ($8 billion).
In the Middle East and North Africa region, private equity fund investments grew from $316 million in 2004 to $5.2 billion in 2006, according to Zawya Private Equity Monitor.