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RIYADH: The Middle East is rapidly emerging as a prime destination for private equity investment, spurred by a global resurgence in dealmaking, according to Bain & Co.’s latest Global Private Equity report.

The report highlights a 37 percent rise in global buyout investment value, reaching $602 billion in 2024, fueled by declining interest rates, renewed investor confidence, and the growing need to deploy idle capital.

As economic diversification accelerates across the Gulf, government-backed initiatives are driving investments in technology, renewable energy, and infrastructure, positioning private equity firms to capitalize on these shifting dynamics.

“The Middle East is entering a dynamic period of growth and transformation, creating unprecedented opportunities for investors,” said Gregory Garnier, head of Bain & Co.’s private equity practice in the region.

He emphasized that success in this market will depend on leveraging local expertise, forming strategic partnerships, and adopting innovative value-creation models.  

This rise in Middle Eastern activity mirrors broader global trends. Public-to-private transactions, for example, are leading the private equity market, accounting for $250 billion in 2024—representing nearly half of transactions over $5 billion in North America.

Global challenges persist

Despite a strong recovery in dealmaking, fundraising remains difficult, with investor caution driven by ongoing economic and geopolitical uncertainties.

While exit activity rebounded by 34 percent to $468 billion, private equity firms still face a backlog of 29,000 unsold companies, limiting distributions to limited partners.

Rising competition for high-quality deals has kept valuation multiples elevated, and increasing debt costs are complicating traditional leveraged buyouts. However, the Middle East stands out as a key market, with governments actively supporting private equity investments through initiatives like Saudi Vision 2030, the UAE’s economic diversification strategy, and Qatar’s long-term plans.

Sovereign wealth funds in the region have also become major players, acting as key limited partners and co-investors in both local and global deals.

Rising sectors and investment focus

Technology continues to dominate private equity globally, accounting for 33 percent of all buyout deals by value. In the Middle East, key areas of focus for investors include fintech, artificial intelligence, digital healthcare, and sustainable infrastructure projects. These sectors align with a growing trend toward impact investing and sustainability, driven by government efforts to foster long-term, eco-friendly economic growth in the Gulf.

Looking ahead, Bain & Co. forecasts that private equity will continue its recovery through 2025, assuming stable economic policies and trade conditions.

Hugh MacArthur, chairman of Bain’s Global Private Equity practice, noted that despite ongoing challenges such as inflation, interest rates, and geopolitical risks, the overall sentiment in the industry remains one of cautious optimism.

JEDDAH: Sharjah’s economy is projected to grow by up to 7.5 percent in 2025, strengthening its position as a hub for diverse sectors, according to a senior UAE official.

Executive Chairman of the Department of Government Relations Sheikh Fahim bin Sultan bin Khalid Al-Qasimi highlighted that the expected expansion will be driven by progressive policies, increased economic integration, and rising foreign investment in strategic industries.

Al-Qasimi underlined the importance of ongoing dialogue with the private sector to strengthen core industries such as manufacturing, trade, agriculture, and environmental sustainability.

“We will be hosting a number of quite frank discussions with the private sector about what the government should be doing better to protect the core industries – manufacturing, trading, agriculture and the environment — that we have,” Al-Qasimi said during the Sharjah Ramadan Majlis 2025.

The event, which was held under the theme “Sharjah: Shaping the Future, Empowering Growth,” was attended by senior officials, including Sheikha Bodour bint Sultan Al-Qasimi, president of the American University of Sharjah; and Thani bin Ahmed Al Zeyoudi, minister of state for foreign trade.

During the gathering, Al-Qasimi said that Sharjah’s economy is evolving at an impressive pace, with the gross domestic product now over 145 billion dirhams ($39.47 billion), and growth of 6.5 percent registered in 2023 — surpassing the global average by 3.5 percentage points. 

“We are immensely proud of the businesses that have found their home in Sharjah, especially those in the private sector, that have been the backbone of our economy for over a decade, and there is a reason why global giants such as Halliburton and Amazon have shown their confidence by investing in our emirate,” he said. 

Al-Qasimi forecasted that continued integration, smarter policymaking, and collaboration with the private sector would contribute to growth ranging between 6.5 percent to 7.5 percent in the coming years.

He added that the automotive industry and vehicle parts trading accounted for 24 percent of the emirate’s economy, with agriculture at 19 percent, at manufacturing on 17 percent — the same level the broader food ecosystem.

Al-Qasimi also pointed to the potential growth in the real estate sector in 2025, citing major developers like Alef Group and Arada, which are making significant investments in the emirate.

Founded by Sheikh Sultan bin Ahmed Al-Qasimi and Prince Khaled bin Alwaleed bin Talal, Arada is at the forefront of Sharjah’s expanding real estate market.

To foster this growth, Al-Qasimi stressed the importance of identifying supply chain interdependencies and collaborating closely with the private sector. “We need to identify the adjacencies and interdependencies in supply chains to understand from the private sector what we need to do to move forward,” he said.

Foreign Trade Minister Al-Zeyoudi pointed to Sharjah’s attractiveness to businesses, bolstered by initiatives like “Invest in Sharjah,” the Sharjah Investment and Development Authority, or Shurooq, and Sharjah Research, Technology and Innovation Park.

“Companies are moving here, and we aim to showcase the incentives, markets, and benefits available through the UAE’s Comprehensive Economic Partnership Agreements,” he said during the same event.

Juma Al-Kait, assistant undersecretary for foreign trade at the Ministry of Economy, emphasized the significance of foreign trade, a cornerstone of the UAE’s economic strategy.

He noted that the UAE’s foreign trade grew by 14.6 percent in 2024, hitting 3 trillion dirhams, outpacing the global rate, which recorded 2 percent. “If we look at Sharjah’s foreign trade, it grew 8.1 percent in 2024 compared to last year. There is a huge potential for the private sector to benefit or to utilize important agreements.” Al-Kait said. 

Sharjah is a key destination for manufacturing, services, and finance, with nearly 96 percent of its economy non-oil-based. Home to six specialized free zones, the emirate offers flexible investment opportunities and advanced infrastructure.