MENA Private Equity: Deal Structuring, Risk, and the $106B Opportunity That Cannot Be Ignored
For most of the past two decades, the Middle East and North Africa sat on the edges of most institutional investment portfolios. Today, that is changing — and the reason is no longer just the region’s oil wealth or the recycling of petrodollars into global markets, but a broader economic shift. Governments across the region are opening up industries they once kept entirely to themselves, such as healthcare, energy, and financial services, and inviting private investors in. For institutional allocators — pension funds, endowments, and large investment managers — that shift creates real opportunity. But to take advantage of it, understanding how deals get done is essential.
The numbers back this up. The EY MENA M&A Insights 2025 report found 884 deals worth US$106.1 billion were completed across the region in 2025 — a 26% jump in deal count and a 15% rise in total value compared to the year before. The MAGNiTT MENA PE 5-Year Report puts the longer trend in context: US$27.6 billion in private equity deals between 2020 and 2024, growing at 14% a year. Healthcare saw the most deals (64 transactions), financial services attracted the most money (US$7.5 billion), and telecoms accounted for nearly half of all PE investment value in 2024. Saudi Arabia and the UAE make up 68% of all regional activity, with Saudi Arabia now the larger market by volume — driven by its Vision 2030 economic transformation program. The IMF’s Regional Economic Outlook for the Middle East and Central Asia projected non-oil GDP across the GCC (Gulf Cooperation Council, a bloc of six Middle Eastern countries) to grow at 3.8% in 2025, the fastest pace in over a decade — a signal that the region’s economic diversification is gaining real traction beyond hydrocarbons.
The Regulatory Revolution: How Saudi Arabia and the UAE Rewrote the Rules
Growth at that scale does not happen by accident. It happens because the rules changed. One of the biggest barriers to investing in MENA used to be the rules themselves. Foreign companies often could not own more than a limited stake in local businesses, licensing was slow, and resolving disputes in court was difficult. That picture is improving significantly.
Saudi Arabia’s updated Investment Law, which came into force in February 2025, replaces a licensing regime that dated back to 2000. It eliminates the old distinction between local and foreign investors and swaps out the previous license requirement for a faster registration process — cutting approval timelines from months to weeks. The UAE moved first: Federal Decree-Law No. 32 of 2021 already allows foreign investors to own 100% of onshore companies in most sectors, ending the old requirement for a UAE national to hold a majority stake. The UAE has also introduced Qualifying Investment Fund structures that keep eligible funds largely tax-exempt — making it more cost-efficient for international investors to operate there. These are not minor tweaks — they change the attractiveness of the entire region for cross-border deals. That said, investing here still requires careful preparation. Rules around ownership disclosure, environmental reporting, and sector-specific licenses remain complex and vary by country. The direction of reform is positive; but the details still demand local expertise.
The Deal Structuring Playbook: How Smart Money Gets Into MENA
Local expertise is the price of admission — but the investors generating the strongest returns are those who also know how to structure their way in, specifically around who they partner with, what protections they lock in, and how they separate ownership from control. In practice, these three principles shape nearly every successful deal structure in the region:
Partnering with government-backed funds. The most common — and effective — approach is co-investing alongside the region’s large sovereign wealth funds: government-owned investment vehicles that play a central role in virtually every major deal in MENA. According to A&O Shearman’s sovereign wealth fund analysis, Abu Dhabi’s Mubadala alone deployed US$29.2 billion across 52 deals in 2024, while the five largest Gulf funds together invested a record US$82 billion, placing them among the top ten dealmakers globally. For international investors, partnering with these funds reduces political risk, opens government relationships, and speeds up regulatory approvals.
Taking minority stakes with strong protections. Rather than buying companies outright — which can trigger regulatory hurdles — many investors take a smaller ownership stake while negotiating strong contractual rights: board seats, the right to be kept informed about major decisions, and pre-agreed terms for how the investment will eventually be sold. Getting these protections locked in at the start is essential, because they are much harder to negotiate after the deal closes. Gulf Capital’s minority stake in Middle East Glass Manufacturing is a straightforward illustration — a regional investor securing a meaningful position in an Egypt-listed business without triggering full acquisition rules.
Separating ownership from operations in infrastructure deals. In energy and utilities, a popular structure involves an investor buying ownership of a physical asset — a pipeline or power plant — while the original operator continues running it day-to-day. The investor earns steady, long-term income from contracted payments. The Aramco US$11 billion gas pipeline transaction with a Global Infrastructure Partners-led consortium is the clearest example — and it has since become a template for similar deals across the region.
Follow the Money: MENA Deals Every Institutional Investor Should Study
The three approaches above are not abstract. They are the mechanics behind some of the most significant transactions happening in the region right now — in hospitals, power grids, payment networks, and data centers. What makes these deals worth studying is not just their scale, but what they reveal: a consistent investment logic, adapted sector by sector, that is quietly reshaping how global capital enters and operates across MENA. Here is how that looks across healthcare, energy, financial services, and digital infrastructure.
Healthcare: Gulf Islamic Investments made a US$160 million minority investment in Abeer Medical Company, one of Saudi Arabia’s largest hospital operators — a structure that works within the Kingdom’s ownership rules while giving the investor a meaningful stake. The subsequent sale of UAE-based Art Fertility Clinics by Gulf Capital to KKR, a US-based global investment firm specializing in private equity and alternative assets, backed IVI-RMA Global.
Energy: Governments across the Gulf are tendering around 24 gigawatts of new renewable energy capacity through a model that lets private companies build and own power plants and sell electricity back to the state under long-term contracts. ADNOC’s US$3.6 billion acquisition of a stake in Fertiglobe, a low-carbon ammonia producer, shows how the region is creating opportunities at the intersection of traditional energy and the clean energy transition.
Financial services and fintech: Egypt has become one of the most active markets for financial technology investment. ADQ's US$35 billion investment program is reshaping the country’s economy by bringing private capital into sectors previously dominated by the state. Development Partners International has also backed Egyptian payments companies Paymob and Khazna through the Nclude platform — building exposure to digital financial infrastructure through a regulated vehicle that already holds the necessary licenses.
Digital infrastructure: PIF (Saudi Arabia’s sovereign wealth fund)-backed Humain’s US$3 billion data centre deal with Blackstone (a US-based global investment firm) — targeting major computing capacity across Saudi Arabia by 2034 — shows how government ambition and private capital are being combined to build long-term, contracted infrastructure assets.
What Can Go Wrong — and How to Prevent It
Every one of those assets carries a counterparty, a regulator, and a governance structure. That is where the risk lives. Long-term contracted assets and government-backed partnerships offer real protection — but they do not eliminate risk. The same features that make MENA attractive, deep state involvement, evolving regulation, and concentrated ownership, are also the sources of its most common investor pitfalls. Understanding them in advance is what separates a well-structured deal from an expensive lesson.The key risks — and how to mitigate them — tend to fall into three areas:
Political and regulatory risk. Co-investing with a local government-backed fund is the most effective protection. Beyond that, investors should make sure government approvals are a formal deal requirement — not an afterthought — and that contracts include clear provisions for what happens if the regulatory environment changes.
Exit risk — getting out at the right price. Getting out at a good price used to be one of the hardest parts of investing in MENA. That is improving. The GCC stock markets produced 53 IPOs raising US$13.2 billion in 2024, a 25% increase year-on-year, meaning a public listing is now a realistic exit plan. Sales to other funds are also growing — global secondary market transactions hit a record US$162 billion in 2024, a 45% increase from 2023, with MENA assets increasingly part of that activity. Also, the World Federation of Exchanges ranks the Tadawul, Saudi Arabia’s stock exchange, among the top fifteen exchanges globally by market capitalization — making it a credible IPO destination for mid-size PE-backed businesses that would have had few realistic listing options just five years ago.
Governance risk — maintaining control after the deal closes. In a region where many businesses are family-run or partly state-owned, investors need strong contractual protections to stay informed and act if something goes wrong. Board seats, regular reporting requirements, and independent management of regulated functions — such as clinical oversight in a hospital — are standard safeguards that also satisfy requirements from local regulators.
The Verdict: MENA Belongs in Every Serious Institutional Portfolio
If the earlier sections showed how investors enter MENA — and where the pitfalls lie — the final question is where the market is heading next. The answer is found in a set of structural shifts that are reshaping the region from the inside out, deepening the pool of investable assets and making the market more sophisticated by the year.
We believe three trends will shape where the next wave of deals comes from. First, governments across Saudi Arabia, the UAE, and Egypt are continuing to sell off state-owned businesses — 53% of Saudi Arabia’s healthcare investment now comes from private sources, with utilities and transport following. Second, new trade agreements between the GCC and major economies are making it easier for international funds to operate in the region. The GCC-UK Free Trade Agreement, which both sides expect to conclude in 2025, is projected to increase bilateral trade by up to 16% — around US$10.8 billion a year — and includes dedicated investment provisions that will directly benefit cross-border PE deal structuring. Third, Islamic finance — the Sharia-compliant equivalent of conventional investment structures — is now standard deal practice across the Gulf, with global Islamic finance assets reaching US$5.4 trillion in 2024 and the GCC accounting for roughly half of that total. Investors who cannot work with these instruments will find themselves locked out of the deepest pools of local capital. Taken together, these three forces — privatisation, trade liberalization, and the mainstreaming of Islamic finance — point in the same direction: the Middle East and North Africa has moved from a region worth watching to one worth actively investing in.
The rules are improving, the deals are getting bigger, and the exit routes are becoming more reliable. Investors who take the time to understand how the region works — its co-investment conventions, regulatory requirements, and governance norms — will find opportunities that simply do not exist anywhere else. The reward is there, but so is the homework. The region has done its part. Now the question is whether investors have done their due diligence.