Hidden opportunities in Middle East private equity

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On the face of it private equity recruitment is dying a death in the Middle East – despite some signs of optimism over a potential recovery and around $5bn in 'dry-powder', key regional players have been struggling and smaller firms are tipped to shut up shop this year. However, finding a new job may simply be a case of targeting your application.

A recent report from headhunters CTPartners suggested that, with few new investments in the region, redundancies could be coming to Middle East private equity teams. “Deal originators unable to impact fully contribute to portfolio company performance," it said "will find it difficult to remain relevant”.

Even an optimistic update from the MENA Private Equity Association, which pointed to greater deal flow and an increasing number of exits, pointed to a “cautious investment trend” and “pockets of activity” (largely in TMT, which accounted for 28% of all investments in 2011).

“Private equity recruitment has been inactive for much of this year,” confirms Bill Allum, managing director of headhunters Execuzen. “The conversations I’ve been having with senior private equity professionals in the region suggest this is unlikely to change any time soon.”

Abraaj Capital completed an investment in Saham Finance earlier this year and NBK Capital is believed to have executed some significant deals, but the likes of Arcapita and Investcorp are going through some very public problems.

So, where are the jobs in Gulf private equity? Firstly, there’s the growth within the large sovereign wealth funds; the Abu Dhabi Investment Authority is reported to be planning to hire 45 private equity professionals this year, and we understand that the Qatar Investment Authority could be hiring up to 25 people this year for its direct investment arm.

It’s not just the larger SWFs that are hiring – single- or multi-family offices are also bolstering their ranks, suggest recruiters, and the smaller, quasi-SWFs (such as Mubadala and the Abu Dhabi Investment Council) are also slowly building investment arms.

“Larger sovereign wealth funds continue to invest in international as opposed to regional markets, and are recruiting internationally for their direct investment arms and, while smaller funds have suffered in recent years, even they are recruiting,” says James Wakefield, director of recruiters Cobalt Abu Dhabi.

“Much of the private equity investment in the region isn’t private equity as other markets would define it – it’s more about identifying potential opportunities and using existing wealth to invest, rather than fundraising – and as a result much of the investment activity and recruitment happens under the radar.”

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