Previously bullish Middle East buy-out kings and financiers have lowered their expectations for the next year, predicting that delayed exits and tough economic conditions will lower returns, according to a new report.
More than 80 per cent of senior private equity executives in the Middle East and North Africa surveyed by Deloitte, the consultants, said they expected returns to decrease, compared to 11 per cent when surveyed in the first half of 2008. Nearly three quarters said exit activity would decrease, compared to just 6 per cent when polled in the first half of last year. Deloitte surveyed 30 private equtiy companies from around the world last month.
Years of oil-backed growth and willing investors have swelled the regional private equity industry. There are now nearly 100 funds focused on the region which have raised US$19.5bn in capital, according to Preqin, a private equity data provider.
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