The role of private equity firms as an alternative investment model in the Middle East and globally

Type :

Research papers

Pages :

27 pages

Format :

.doc

Published date :

10/07/2009

Category :

Economics & finance

Sub category :

Finance

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Summary :

Abstract
Introduction
Private equity: Process and models
Venture capital in private equity
Buyouts
Other models used on an international scale
Due diligence
Islamic finance and private equity
Emerging markets private equity fundraising by region 2003-2006
Reports by International Finance Corporation (IFC)
Arab private equity: A case study of Abraaj Capital
1. The Abraaj model
2. Current investments of Abraaj Capital
3. The composition of FDI in the MENA region
4. The private equity sector in the MENA region
5. The Kaplan method
6. Job creation and turnover figures from Tunisian, Tuninvest, private equity fund
Analysis of results and discussion
1. An analysis of savings rates in the MENA region
2. The interests of the other countries (USA, China and European countries)
3. The strong desire for investment in the Gulf region
4. The need and importance of promoting entrepreneurial finance in MENA
Conclusions
Sources

Abstract

The global economic reality has witnessed a recent international increase in the private equity markets. This fact has brought up many concerns as to whether this will have a positive or negative outcome (Financial Services Authority, 2006). This document will present an overview of private equity on a global scale, as well as look into the role of private equity in the middle east. The dissertation will also reflect on some of the effects of the enormous onslaught of this type of investment on such areas of the region as unemployment levels and economic indicators. This document attempts to evaluate the impact of these transactions on organizations in the middle east, as well as the global reality as a whole.

In field research conducted by The World Economic Forum, it was found that the total value of companies (both equity and debt) acquired in private equity buy-outs was $3.6 trillion dollars, from the years 1970 to 2007. Between 2001 and 2007 alone, there were $2.7 trillion dollars in private equity firm investments. This represents a huge expansion in private equity investments on a global scale. private equity has often been criticized in its ability to make relatively few managers and principal shareholders incredibly wealthy. Some commentators have noticed that private equity allows "lifestyles recalling the earlier gilded age of the late 19th-century United States." Politicians have cited the fact that private equity is often associated with a loss of jobs when companies are forced by equity groups to restructure after a takeover. (Aczel, 1996)