The realm of private equity in Saudi Arabia is experiencing a vigorous expansion, making it a notable force within the nation’s financial sector. A recent report covering the period from 2019 to 2023 has highlighted an impressive swell in private equity undertakings, with figures for 2023 topping $4 billion.
The comprehensive report, backed by SVC, delineates a steady climb in private equity activities starting from 2020, with a staggering 3.7-fold escalation in 2021 and an even more pronounced 5.9-fold uptick in 2022. Furthermore, there has been an evident pivot towards buyout transactions within private equity dealings, which have seen their share increase by 20 percent from 2020 to 2023. Growth transactions also enjoyed a slight rise over the same timeframe.
Buyouts have become the linchpin of the Saudi private equity sector, consistently accounting for roughly 80 percent of the total capital committed in these transactions over the past five years. This trend signifies a strategic redirection in investment preferences and the growing stature of private equity in the nation’s financial circles.
Delving into industry specifics, the report points to a considerable variety in transaction types and a focus on certain key sectors. The food and beverages industry has surfaced as the most popular in terms of transactions, while manufacturing has dominated in investment volumes, securing 46 percent of the capital invested during the study period. These insights reflect a multifaceted investment environment and a deliberate emphasis on pivotal industries that are central to Saudi Arabia’s economic advancement.
Dr. Nabeel Koshak, CEO and board member at SVC, commented on the report’s significance, emphasizing the organization’s dedication to providing insightful market data and fostering an understanding of the changing investment scene in the Kingdom. He also mentioned SVC’s commitment to nurturing various aspects of private capital through strategic investment initiatives and solutions designed for the local ecosystem.
Philip Bahoshy, CEO of MAGNiTT, underlined the critical role of private equity in sculpting the financial landscape of Saudi Arabia and offered perspectives on the industries and leading entities within this domain.