Private markets draw more Middle East capital as companies stay private

Dubai: Private markets are taking a larger share of investor attention, with more capital moving into assets outside traditional stock and bond markets. A growing number of companies are choosing to remain private for longer, which is changing where and how value is created.

That change is shaping how investors build portfolios. Public markets continue to offer liquidity and transparency, but private markets are opening access to earlier stages of business growth and a wider range of sectors.

Access comes with trade-offs

The differences between public and private markets are clear in how investors participate. Listed markets allow easy entry and exit, along with regular pricing and disclosure. Private markets operate with longer timelines and less frequent liquidity.

“Public markets offer liquidity and transparency, whereas private markets provide long-term capital, control, and return potential,” said Tajinder Virk, Co-founder and Group CEO of Finvasia.

Private investments often require capital to be locked in for years, and exit routes can be limited. In return, investors gain exposure to companies and assets that are not available on public exchanges.

More value sits outside public markets

A large share of economic activity now takes place in private companies. Many firms are delaying listings or choosing not to list at all, keeping growth within private ownership structures.

Private market assets under management have crossed $13 trillion globally, supported by institutional investors such as sovereign funds, pension funds and large family offices.

“Private markets are moving from being an alternative allocation to a core component of global portfolios,” Virk said.

Investor interest is driven by diversification, return expectations and access to sectors that are harder to reach through listed markets.

Middle East investors step up allocations

In the Middle East, participation in private markets has expanded steadily. Sovereign wealth funds and large family offices are active across global transactions, often committing capital at scale.

Recent deals highlight this trend, with regional investors involved in major international transactions and building partnerships across private credit, infrastructure and private equity.

“The ecosystem is smaller than the US or Europe, but more agile, with faster decision-making and increasing participation from global fund managers,” Virk said.

Saudi Arabia and the UAE continue to account for a large share of activity, supported by economic diversification programmes and strong liquidity.

Growth spreads across segments

Several areas within private markets are seeing strong momentum. Private credit has grown rapidly, supported by demand for flexible financing and reduced lending capacity from traditional banks.

The segment now spans a wide range of strategies, including asset-backed lending and infrastructure-related financing.

Infrastructure investment is also expanding, driven by demand for energy projects, transport networks and digital systems such as data centres.

Private equity and venture capital remain active, particularly in technology and innovation-focused sectors, though investors are becoming more selective.

Filling gaps in the financial system

Private markets play a role alongside banks and public markets by funding businesses and projects that require long-term capital.

They support companies at different stages, from early development to expansion, and help finance large-scale infrastructure.

“Private capital supports businesses before they are ready for public markets, enabling innovation, job creation, and economic expansion,” Virk said.

Flexible deal structures allow investors to tailor financing based on the needs of each project or borrower.

Risks remain part of the picture

Private market investments require careful evaluation. Limited liquidity means capital is committed for longer periods, and valuation practices can vary across funds and strategies.

Access is also restricted in many cases, with participation largely limited to institutional and professional investors.

As the market grows, attention is shifting toward governance standards, reporting and ways to improve liquidity without changing the long-term nature of the asset class.

A bigger role in global portfolios

Private markets are becoming more prominent in how capital is allocated, both globally and in the Middle East. Investors are looking beyond listed assets to capture a wider set of opportunities.

In the region, strong capital availability and ongoing investment programmes are supporting this trend, with private markets playing a larger role in financing growth across sectors. The balance between public and private markets continues to evolve, with each serving a different purpose in the investment landscape.