MENA PE Market Records US$27.6bn in Regional Activity from 2020-2024: MAGNiTT Report

Private equity (PE) activity in the Middle East and North Africa (MENA) region totaled US$27.6 billion between 2020 and 2024, growing at a compound annual growth rate (CAGR) of 14 percent, according to the inaugural ‘MENA PE 5-Year Report’ by venture data platform MAGNiTT. While the UAE dominated deal activity from 2020 to 2022, Saudi Arabia took the lead in 2023, accounting for 41 percent of transactions that year.

Saudi Arabia’s ascendancy in MENA’s PE market

The shift in investment patterns reflects Saudi Arabia’s increasing attractiveness, fueled by the Kingdom’s Vision 2030 initiatives and rising participation from sovereign wealth funds (SWFs) such as the Public Investment Fund (PIF). Saudi Arabia and the UAE together accounted for 68 percent of total PE transactions in MENA over the past 5 years, with the UAE leading at 37 percent and Saudi Arabia securing 31 percent.

Despite the UAE maintaining the highest disclosed deal value at US$13.5 billion, Saudi Arabia followed closely with US$11 billion. Notably, in 2024, Saudi Arabia contributed over half of the region’s total PE investment value, reflecting its growing dominance. The Kingdom’s share in the deal count rose sharply from 20 percent in 2020 to 41 percent in 2023, demonstrating a 67 percent CAGR.

Egypt and other frontier markets gain traction

Egypt also emerged as a key player, accounting for 9 percent of deal volume and US$2.5 billion in transactions over the 5-year period. In 2024, Egypt held a 12 percent share of the region’s total disclosed PE investment value, showing its expanding role in the investment landscape.

Beyond the UAE, Saudi Arabia, and Egypt, investment in other MENA markets increased from 17 percent in 2021 to 22 percent in 2024. This shift indicates a growing interest in frontier markets as investors seek diversification beyond traditional strongholds.

Market volatility and investor sentiment

MENA’s PE market exhibited significant volatility, peaking at 97 transactions in 2022 before declining in 2023 and 2024. In 2024, deal volume dropped 24 percent year-on-year as investors recalibrated strategies amid tightening credit conditions, rising interest rates, and the disappearance of leveraged buyouts.

Unlike global PE markets, which rebounded in 2024 with a 12 percent increase in deal volume and a 22 percent rise in deal value, MENA investors remained cautious. Strategic growth investments took precedence over debt-heavy transactions as firms adapted to the shifting financial landscape.

Evolving investment strategies: PE growth vs. buyouts

MENA’s PE landscape has transformed significantly over the past five years. In 2020, buyouts accounted for 56 percent of transactions, but their share dropped to 29 percent by 2024, while PE growth deals surged to 71 percent. By the end of 2024, investment value was nearly evenly split between PE growth at 51 percent and buyouts at 49 percent, highlighting a preference for scaling businesses over outright acquisitions.

While most transactions remained under the US$50-million-mark, large-scale deals exceeding US$1 billion dominated disclosed values. However, their share peaked at 77 percent in 2023 before dropping to 47 percent in 2024, reflecting investor caution toward high-stakes acquisitions.

Sectoral trends: Healthcare and finance led dealmaking

Healthcare led in deal count, with 64 transactions over 5 years, representing 18 percent of total PE deals. The finance sector attracted the highest disclosed deal value, totaling US$7.5 billion—82 percent more than manufacturing. Meanwhile, telecom captured 47 percent of MENA’s total PE value in 2024, indicative of the sector’s growing appeal as digital infrastructure investments continue to expand across the region.

Other attractive sectors included IT solutions, transport and logistics, sports and fitness, sustainability, and energy—all of which gained traction among investors seeking long-term growth potential.

SWFs drive major transactions

Sovereign wealth funds and institutional investors played a critical role in shaping MENA’s PE landscape. Saudi Arabia’s PIF and the Abu Dhabi Developmental Holding Company PJSC (branded ADQ since 2020) were key drivers behind mega-deal activity, particularly in capital-intensive and scalable sectors. Their ongoing involvement is expected to steer future investment flows across the region.

Outlook: Cautious optimism with mid-market focus

Looking ahead, MENA’s PE market is poised for recalibration, with investors shifting focus toward mid-market growth opportunities and sector-specific plays. While the potential return of global buyout activity and interest rate reductions could revive leveraged transactions, investor caution is expected to persist.

Despite the sharp decline in PE investment in 2024, ongoing economic reforms, diversification strategies, and digital transformation initiatives position the MENA region for long-term private equity growth. The continued participation of SWFs and institutional investors will remain key to shaping the investment landscape.

• Previous Article UAE Top-Up Tax for Multinational Enterprises: An Explainer
• Next Article NEOM: Understanding Saudi Arabia’s Visionary Project