eFinancialCareers

With the value of private equity deals in the Middle East tipped to soar to $670bn over the next 10 years, it’s no wonder firms are scrabbling to bolster their teams in the region.

If the ambitious target is achieved, it will vastly overshadow the $22.8bn raised by private equity firms in the region between 2002 and 2007.

Growth will be driven by sovereign wealth funds and industry leaders in the GCC, including Abraaj Capital, Dubai International Capital (DIC) and Kuwait-based Global Investment House.

DIC is set to up exposure to the Middle East, Africa and India, EFG-Hermes is to quadruple local private equity investments to $4bn in four years, Arcapita has re-focused its buyout attention to the GCC, and Shuaa Capital’s new Saudi office will include private equity.

Not surprisingly, therefore, experience in the region is paramount when it comes to recruiting, says Nick Careless, managing director of recruiters AP International: “We’re hiring executives and senior management with a demonstrable track record in emerging markets – specifically, MENA, the Indian sub-continent and SE Asia. These managers are now also seeking to build out their teams.”

He adds that private equity is expanding across the GCC, but talent is being brought in from established markets to kickstart the activity.

Michael Ketley, managing director of recruiter MRK International, adds: “In the Middle East there’s a tendency to nickel and dime it. Experienced private equity professionals in developed markets will be earning a lot, and local players need to recognize this. However, the real money is to be had in performance fees and carried interest.”

Careless agrees that the big money is dependent on performance, and reckons in spite of the hunger to expand, it’s not easy to break into private equity in the Middle East: “There’s no gung-ho approach, throwing out money to get people on board. Each hire is carried out with careful due diligence.”

Managing director roles can pay $200k-$500k, with up to 200% bonus as well as carried interest, according to figures from EM Services. The humble analyst only gets $40-$100k, with a 30-80% bonus potential.

Abraaj Capital predicts the following potential private equity investments over the next 10 years:

• Power – $200bn
• Water – $134bn
• Healthcare – $49bn
• Education – $18bn
• Transport & ports – $188bn
• Petrochemicals – $87bn

“The favourable economic environment and long-term growth initiatives undertaken by regional governments have been primary growth drivers of private industry in the region,” says Arif Naqvi, Abraaj Capital’s vice-chairman and group chief executive officer.