Amwal AlKhaleej: Europe’s Financial Crisis and its Impact on the Arab World

Economies in the Middle East-North Africa region were already in trouble because of investor nervousness after the Arab Spring. Now large parts of Europe are in turmoil, and the road to recovery is likely to be long and hard. What does this spell for companies and investors in the Arab world? For guidance, analysts and investors look at demand for oil, trade volumes, and investment flows between the MENA region and Europe to gauge what will come.

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Amwal AlKhaleej: Amid Political Unrest, Private Equity Firms Navigate Challenges in the Middle East

Riyadh-based private equity firm Amwal AlKhaleej operates exclusively in the Middle East and North Africa (MENA) region. The firm has tailored its approach to the local business culture, where debt financing is relatively limited and family-owned businesses are prevalent. Given the turmoil that has rocked the Arab world for the past several months, how are private equity investors reacting? What will business prospects in the region be in the future? Fadi Arbid, chief executive officer of Amwal AlKhaleej, discussed these questions and more with Knowledge@Wharton.

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Amwal AlKhaleej: What Upheaval in the Middle East Means for Business

The events in the Middle East and North Africa (MENA) are bringing historical political and social changes. But what do they mean for business? To gain some perspective, Knowledge@Wharton spoke with Wharton finance professor Bulent Gultekin and Fadi Arbid, CEO of Amwal AlKhaleej, a leading private equity firm in the region. In the podcast below, Gultekin says expects short-term “volatility and uncertainty, but in the long run I think things will settle down and probably there will be economic reforms … provided that political reforms go smoothly….” Arbid suggests that the current upheavals will speed up economic reforms already underway. One concrete change: Dubai is likely to gain as a center for banking and expatriots at the expense of Bahrain.

 

Amwal AlKhaleej: Navigating Saudi Arabia’s Private Equity Landscape

Saudi Arabia has one of the strongest and most dynamic economies in the Gulf Co-operation Council, and is now leading growth in the region, driven by solid demographic fundamentals, sound economic reforms and capital surpluses built on hydrocarbon exports. So why have so few private equity firms succeeded in closing deals in Saudi Arabia? Experts from Wharton and Amwal AlKhaleej say that firms fail to understand the unique business and cultural aspects of doing commerce in the country.

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Amwal AlKhaleej: Private Equity in the MENA Region -- Is the Growth Model the Right Model?

With bank lending to companies in the Middle East and North Africa (MENA) region becoming increasingly conservative, Private Equity (PE) companies are fielding more inquiries about investment partner opportunities. Companies in the MENA region, however, look for a set of values in investors that differs from those sought by their counterparts in the West. Chief among the differences is a preference for minority, including large minority, stakes in growth capital deals.

For PE firms accustomed to the typical leveraged buyout model of the West, this distinction can appear to reduce transparency. This article, produced by Knowledge@Wharton and sponsored by Amwal AlKhaleej, looks at what lies behind the MENA companies’ preferences and what they mean for potential PE investors in the region.

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Amwal AlKhaleej: Private Equity and the MENA Region -- Best Post-acquisition Practices for Growth Capital

The Middle East and North African (MENA) private equity industry operates very differently than the international industry. The chief reasons for this include the relative newness of the industry in the MENA region, the level of development and the needs of the regional corporate world. Experts at Wharton and Amwal AlKhaleej say private equity strategies in the region must recognize these differences when it comes to creating value in investee companies. They identify six key areas where regional firms can add value to portfolio companies: business networks, geographical expansion, professionalizing management, financial expertise, corporate governance and liquidity events.

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Amwal Alkhaleej -- Private Equity in the Middle East: Assessing the Impact of the Financial and Economic Crisis

After years of cheap credit and willing investors, private equity in the Middle East and North Africa (MENA) region now faces a challenging period. International banks are frantically deleveraging and plummeting stock markets are blocking the exits for fully invested and mature funds. At the same time, investors are shying away from illiquid asset classes.

Yet experts from Wharton and Amwal AlKhaleej, a leading MENA-focused private equity house headquartered in Saudi Arabia, say that regionally oriented private equity funds that have capital to invest, adapt to the new realities, and follow a MENA-compatible strategy are likely to do well in the future. In fact, the credit crunch could even end up giving a boost in the long term to Middle East private funds with the right model. Moreover, despite the many challenges unleashed in 2008, the region’s economies on balance are likely to fare better than any other region in the world going forward.<P>

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