British Standard Chartered’s (STAN.L) private equity arm expects to close a $100 million private equity deal in the Gulf Arab region before the end of this year.
“We should close one deal this year between $75 million and $100 million,” Taimoor Labib, the bank’s private equity head for the Middle East and North Africa, said on Thursday.
“We are actively looking at the manufacturing business, retail and healthcare,” he said, adding that the bank is seeing attractive opportunities in Saudi Arabia, United Arab Emirates and Kuwait.
The British bank, which invests in mid-market deals, last year bought a minority stake in family-owned Saudi Binladin Group’s unit for $75 million. The bank also completed a $75 million mezzanine investment in Bahrain-based Jawad Group.
Deal activity in the Middle East has plunged in the last two years, with investors backing out from capital calls and sellers demanding higher prices. Private equity firms faced various challenges including buyer/seller valuation discrepancies, tight financing and finding the right exit strategies.
But Labib is seeing signs of recovery in the private equity market driven by more active equity markets and higher government spending in countries like Qatar and Saudi Arabia, where billions of dollars are being spent to boost infrastructure and provide housing for the growing population.
“Fund raising remains difficult but the private equity market is back on its way in the MENA,” said Labib. “Small firms are almost out of business and the big guys will get even bigger,” he added. Standard Chartered’s private equity arm has invested more than $3.5 billion in over 65 companies throughout Asia, Africa and the Middle East since 2002, Reuters reported.