Bright outlook for investment in UAE

Dubai: Last year most Middle East private equity investments flowed primarily to the region's three largest economies, namely Saudi Arabia, the UAE and Egypt.

The three countries accounted for 67 per cent of the deals announced in the year to date, according to statistics on the industry compiled by Gulf Capital, a UAE based private equity firm.

Going by the industry sentiment this trend is likely to continue in the next 12 months.

Abraaj Capital, the Middle East's biggest private equity firm, sees investment opportunities in Saudi Arabia, Egypt and Turkey in industries such as logistics, transport, consumer businesses and financial services.

"We're looking at opportunities in a lot of sectors... a lot of sectors that we think will benefit from recovery in this region.

"We are focused on industries that were fairly counter-cyclical, resilient and defensive including the health care and education sectors," said Mustafa Abdul Wadood at private equity firm Super Return Middle East.

In the wake of the financial crisis, investments have focused on selected defensive sectors such as education, health care, utilities, tele-communication and food. These accounted for five of the 12 deals completed so far this year.

According to Gulf Capital, first-generation investment strategies focused on acquiring numerous min-ority pre-IPO stakes are losing appeal with investors.

"Regional and global private equity investors are clearly interested in only one next-generation investment strategy: control buy-outs focused on operational improvements and true value enhancements," said Karim El Solh, Chief Executive Officer of Gulf Capital.