Private Equity - United Arab Emirates

United Arab Emirates

In the United Arab Emirates, the deal value in the Private Equity market is projected to reach €0.60bn in 2024.
It is anticipated that this market will exhibit an annual growth rate (CAGR 2024-2025) of 26.67%, resulting in a projected total amount of €0.76bn by 2025.
The average size per deal in the Private Equity market in the United Arab Emirates amounts to €33.15m in 2024.
A global comparison indicates that the highest deal value is achieved in the United States, with a figure of €545,100.00m in 2024.
In the Private Equity market, the number of deals in the United Arab Emirates is expected to reach 18.24 by 2025.
In the United Arab Emirates, the Private Equity market is increasingly focused on technology-driven investments, reflecting the country's ambitions to diversify its economy.

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Analyst Opinion

The Private Equity market in the United Arab Emirates is facing minimal decline, influenced by factors such as cautious investor sentiment, geopolitical uncertainties, and fluctuating oil prices, which are impacting overall investment activity and growth prospects.

Customer preferences: The Private Equity market in the United Arab Emirates is witnessing a growing interest in sustainable and socially responsible investments, influenced by a younger, environmentally conscious demographic. As millennials and Generation Z prioritize ethical business practices and sustainability, private equity firms are increasingly focusing on green technologies and renewable energy projects. Additionally, there is a rising demand for innovative consumer goods that cater to changing lifestyles, particularly in health and wellness, driving investment into sectors aligned with these evolving consumer preferences.

Trends in the market: In the United Arab Emirates, the Private Equity market is increasingly focusing on sustainable investments, with firms targeting green technologies and renewable energy initiatives to appeal to a socially responsible demographic. The trend is fueled by a younger population that prioritizes ethical practices and sustainability. Additionally, there is a marked interest in innovative consumer goods and health-focused products that reflect evolving lifestyles. This shift signifies potential growth opportunities for investors and may redefine traditional investment strategies, compelling stakeholders to adapt to these changing market dynamics.

Local special circumstances: In the United Arab Emirates, the Private Equity market is uniquely shaped by its strategic location as a gateway between East and West, facilitating access to global investors. Culturally, the emphasis on family-owned businesses and strong relationships influences investment approaches, promoting a collaborative mindset among stakeholders. Additionally, regulatory frameworks supporting foreign investment and encouraging innovation create an appealing environment for private equity firms. This blend of geographic advantages, cultural nuances, and progressive regulations drives a distinctive investment landscape focused on sustainability and technological advancement.

Underlying macroeconomic factors: The dynamics of the Private Equity market in the United Arab Emirates are significantly influenced by macroeconomic factors, particularly the policies of the central bank and prevailing interest rates. Lower interest rates typically reduce the cost of borrowing, making it easier for private equity firms to leverage funds for investments, thereby fostering deal-making activity. Conversely, rising interest rates can tighten financial conditions, leading to increased caution among investors and a slowdown in transaction volumes. Additionally, the UAE's stable economic growth, driven by diversification efforts away from oil dependence, enhances overall market confidence, attracting global private equity players eager to capitalize on robust infrastructure and innovation opportunities.

Methodology

Data coverage:

The figures are based on deal value, number of deals, the average size of each deal, and assets under management within the Private Equity market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, and publicly available databases. In addition, we use relevant key market indicators and data from country-specific associations, such as: GDP, total investment (% of GDP), household wealth (per Adult), high income (% of population), and number of high-net-worth individuals (HNWI). This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are total investment (% of GDP), household wealth (per Adult), number of high-income persons, and number of high-net-worth individuals (HNWI).

Additional notes:

The market is updated twice a year in case market dynamics change.