January 12, 2021

Buyout Industry to Get Image Makeover in Mideast With New Body

By Nicolas Parasie

‎January‎ ‎11‎, ‎2021‎ ‎5‎:‎37‎ ‎PM

  • Regional private equity sector reeling from Abraaj, Al Masah
  • New entity says 2021, 2022 will offer investors unique chances

Private equity executives in the Middle East have set up a new industry body aimed at improving the sector’s image and attracting more foreign investors following a couple of high-profile failures in recent years.

Named the MENA Private Markets Association, or MENA-PMA, the organization expects to offer investors this year and next a “unique” opportunity, since geopolitical risks are on the wane and because of what it called the region’s “compelling youth demographics.”

The private equity industry in the Middle East, and particularly in Dubai, has been shaken by the collapse of Abraaj in 2018 and the arrest of several of its executives amid allegations that it misused investor funds. Another buyout fund, Al Masah Capital, was placed in liquidation last year after being fined for allegedly misleading investors about fees, with its founder banned from working in the Dubai International Financial Center.

The new entity, started by executives at Affirma Capital, Gateway Partners and NBK Capital Partners among others, suggested the recent scandals served as a motivation for its founding.

“We have seen some regional groups act in a non-compliant manner and we all are left to defend our industry,” the association said in a statement Monday.

Other objectives of the non-profit organization include promoting the region as a global and regional investment destination and shaping “the media narrative,” according to the statement.

Dubai’s financial regulator said last year it has been stepping up scrutiny of firms to avoid a repeat of the Abraaj and Al Masah failures.

“Post Covid-19, we will only be as strong as our weakest link and we need to collectively apply the lessons learned in order to regain our foothold as among the strongest investment destinations, both regionally and globally,” the group said.


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