Is your investment strategy aligned with the forces reshaping private equity in MENA in 2025?
Author: Abdullah Al Dereai
10 minute read
01 June 2025
Macroeconomic & Regional Drivers
The Middle East and North Africa (MENA) region is experiencing a notable surge in private equity (PE) investments, driven by strategic economic diversification efforts across GCC countries, Egypt, and other nations. Initiatives like Saudi Vision 2030, UAE’s Economic Agenda, and Egypt’s Vision 2030 are fueling capital inflows into sectors such as infrastructure, artificial intelligence, digital platforms, and renewable energy.
Sovereign Wealth Funds (SWFs) serve as key limited partners, with approximately 80% of Middle Eastern investors planning to increase PE allocations within the next year, and around 50% already allocating over 20% of their assets under management (AUM) to these investments.
Fundraising & Fee Landscape
In the evolving private equity sector, Limited Partners (LPs) in the Middle East and North Africa (MENA) are advocating for more tailored fee structures, lower than the traditional 2%, coupled with increased transparency, aligning with global industry trends. Simultaneously, the PE fundraising environment is contractionary in 2024, with global commitments declining by over 20%, with continued headwinds into 2025. Smaller funds are disproportionately affected, while mega-fund activities (> $5 billion) remain resilient in attracting capital. Key challenges persist.
Insights
$18T
$495B
$495B
At the start of 2025, global private market assets (including private equity, credit, real estate, etc.)
$495B
$495B
$495B
In Q1 2025, Focused on private equity alone, global buyout deal values reached approximately.
50%
$495B
50%
Middle East investors have allocated over 20% of their AUM to private equity, with approximately 80% planning to increase those allocations, as of 2025.
On June 1, 2025, Laval Consultations conducted a comprehensive study to assess the trajectory, performance benchmarks, and strategic shifts shaping the private equity landscape across the MENA region. The research draws on a synthesis of primary analysis, regional investment data, and insights from sovereign wealth funds, institutional investors, and private equity managers operating in key markets including Saudi Arabia, the UAE, Egypt, and Qatar. Building on Laval’s advisory experience in financial and regulatory consulting, the study evaluates sectoral IRR benchmarks, projected capital allocations, evolving fund structures, and the impact of ESG frameworks. This 2025 analysis offers forward-looking insights to help investors, regulators, and fund managers navigate the region’s rapidly maturing private capital ecosystem.
Dealflow & Exit Environment
Investment Themes & Sector Focus
Investment Themes & Sector Focus
The MENA region demonstrated resilience in 2024’s M&A activity, with 475 deals, a mere 4% decline year-over-year—highlighting its strength compared to global trends. Notably, five transactions exceeded $1 billion, with the largest reaching $3.6 billion.
Meanwhile, globally, Q1 2025 experienced a significant increase in private equity exit volumes and values, rising approximately 18%+ YoY, fueled by sponsor-to-sponsor sales, secondaries, and continuation vehicles. Despite this momentum, a substantial industry-wide backlog of roughly $3 trillion of unsold deals continues to temper exit activity.
Investment Themes & Sector Focus
Investment Themes & Sector Focus
Investment Themes & Sector Focus
Priority sectors, including energy infrastructure, digital and AI, renewables, fintech, logistics, and healthcare, continue to drive investment focus, with AI and technology remaining the dominant focus.
The largest private equity deals in the UAE and KSA feature AI-driven platforms and digital infrastructure. Meanwhile, growth-stage (Series A/B) digital and enterprise software rounds are gaining momentum in KSA and UAE within the MENA venture scene, setting the stage for subsequent PE follow-on investments.
Market Structure & Innovation
Investment Themes & Sector Focus
Market Structure & Innovation
The MENA's private capital ecosystem is actively evolving as it adopts innovative fund models, including evergreen vehicles, GP-led continuation vehicles, NAV-based lending, co-investment strategies, and secondaries.
In this dynamic environment, SWFs and regional LPs are negotiating bespoke terms that help reduce headline fees while simultaneously emphasizing governance and alignment.
Overview of anticipated 2025 MENA private equity growth by sector, based on available regional and global trends
Global healthcare private equity experienced stable to rising deal volume in 2025, with the sector in the MENA region poised to follow suit, supported by tech-enabled care and biopharma mega-deals. Meanwhile, digital banking and fintech traction in the GCC have kept PE investment momentum robust through the year. As telecom providers pivot into AI, data centers, and next-generation connectivity, PE inflows are expected to grow at a faster rate than the average. Additionally, private equity interest in fast-growing enterprise software, AI platforms, and B2B tech is accelerating, driven by global tech PE trends.
This report by Laval Consultations provides a benchmark of sector-specific Internal Rates of Return (IRR) within the MENA private equity sector for 2025. Assuming a typical investment horizon of 5 to 7 years, the analysis projects IRRs of 18% for the IT & Digital sector, 16% for the Telecom sector, 14% for the Healthcare sector, and 12% for the Financial Services sector. These projections are grounded in regional investment trends, ongoing digital transformation initiatives, and sovereign-state capital flows across the GCC.
The Future of Private Equity in MENA
A Strategic Outlook Beyond 2025
Macroeconomic Resilience and Diversification Will Accelerate PE Growth:
MENA economies, particularly GCC countries like Saudi Arabia, UAE, and Qatar, are intensifying efforts to transition away from hydrocarbons through strategies aligned with their national visions such as Saudi Vision 2030 and UAE Centennial 2071. These initiatives focus on creating a regulatory framework that is conducive to private capital, expanding sovereign fund-led growth with entities like PIF, Mubadala, and QIA, and opening formerly restricted sectors including healthcare, education, transport, and fintech to private and foreign investment. As a result, projections indicate that MENA private equity assets under management (AUM) will grow at a compound annual growth rate (CAGR) of 12–15% through 2030, outpacing the growth rates seen in other emerging markets.
Sovereign Wealth Funds (SWFs) Will Drive LP Momentum:
MENA’s Sovereign Wealth Funds (SWFs), which control over $4 trillion in assets, are increasingly shifting their focus toward private markets. Nearly 80% of surveyed SWFs plan to boost their private equity (PE) allocations, often seeking customized fee structures, co-investment rights, and ESG-aligned opportunities. This growing trend not only reduces fundraising risks for general partners (GPs) but also supports the development of regionally anchored megafunds. Consequently, it fosters the growth of deeper domestic deal pipelines across multiple sectors, fueling broader regional economic expansion.
Regulatory Maturity and ESG Integration to Deepen Market Credibility:
Regulators throughout the MENA region, including ADGM, CMA Saudi, and DIFC, are increasingly adopting ILPA-aligned transparency standards and anti-greenwashing protocols. ESG reporting frameworks are becoming mandatory for large-cap portfolios and infrastructure deals, reflecting a broader shift towards sustainable investing. Additionally, Sharia-compliant private equity is experiencing growth, particularly within family offices and institutional portfolios. Projections suggest that by 2028, more than 70% of institutional private equity deals in MENA will incorporate ESG scoring, with Sharia-compliant private equity representing approximately 15–20% of the capital deployed in the region.
Strategic Outlook
Summary
Laval Consultations' research provides a data-driven outlook on the MENA private equity market through 2025, highlighting deal flows, sector trends, investor activity, and returns. From 2020 to 2024, deal values reached $27.6 billion, with a dip to $4.9 billion in 2024, followed by signs of recovery in mid-2025. Sovereign wealth funds like PIF, Mubadala, and QIA are key players, with many LPs increasing PE allocations over 80% plan to do so, and nearly half allocate more than 20% of their assets. The study used financial models and visuals to project IRRs (up to 18% for IT & Digital) and sector growth (up to 15%). It also examined regulatory trends such as ESG, governance, and Sharia compliance, indicating regional progress toward the development of mature private capital markets. Finalized in June 2025, the research aims to guide institutional investors, family offices, policymakers, and fund managers by outlining future opportunities and dynamics in the MENA private equity market.
Team Members
