US private equity giant General Atlantic opens Gulf offices

Dana Smillie/CC BY-SA 2.0

• Middle East investor since 2015
• UAE and Saudi licenses sought
• Mena startup funding rebounds

Global private equity firm General Atlantic, which manages $77 billion in assets, is opening offices in the UAE and Saudi Arabia.

The company has been investing in the Middle East since 2015 without a local base, but is now establishing a stronger foothold as it nears the completion of new investment deals in the region.

It has so far invested about $400 million in regional players including online real estate search platform Property Finder and payments fintech Network International.

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Samir Assaf, senior advisor and chairman of Middle East and North Africa (Mena) at General Atlantic, told Abu Dhabi Finance Week on Tuesday that the New York-based company is actively working to obtain licenses from Abu Dhabi Global Market (ADGM) and Saudi Arabia’s Capital Markets Authority (CMA).

“Hopefully, we will get it done quickly,” he said, revealing that General Atlantic is also preparing to finalise “three or four more investments” in the region.

This development aligns with the recent turnaround in startup funding within the Mena region, which saw a significant rebound last month after a four-month downturn.

According to research by venture capital company Wamda, Mena startups secured $156 million in October, more than doubling September’s $36 million and representing a 333 percent month-on-month increase.

However, despite this surge, the figure marks a 76 percent year-on-year decline. 

From January to October, the region’s startups have raised a total of $1.9 billion, which is a 36.6 percent decrease from the $3 billion raised during the same period last year.

But Assaf remains optimistic about the region’s prospects. 

“You put aside the geopolitical imbalance, however you look at it, the future seems bright in this region – hence the attraction of General Atlantic to come and invest,” he said.

He pointed to prospects in the GCC in particular as a high user of digital technology with robust digitalisation and high consumption, and well-enabled access to goods and services.

“We feel that some of these companies can become seriously regional or even global,” he said. 

“What they need is to be scaled up.” 

Private equity firms are increasingly turning towards the Middle East in response to capital constraints faced by US pension funds and broader market challenges, including inflation and rising interest rates. 

The allure is amplified by its proximity to major sovereign wealth funds such as Saudi Arabia’s Public Investment Fund, Abu Dhabi Investment Authority and Mubadala Investment Co., which collectively manage some $1.5 trillion.

According to alternative assets data provider Prequin, private equity investors ploughed $14 billion into a record 64 Middle East-based buyouts in 2022, continuing “a steady rebound since the pandemic”.