Mideast investment cuts hit private equity

Middle East families and sovereign wealth funds are slashing their investments and demanding more favourable terms from private equity funds following the financial crisis.

The region has been a significant source of capital for the private equity industry in recent years but many investors are still suffering from the collapse in liquidity that followed the collapse of Lehman Brothers.

One private equity executive who recently finished raising a buy-out fund said: "The one area where we have not raised any money is the Middle East. The region shut down 12 months ago."