MENA Private Equity Deals Fall 38% in H1 As Risk Aversion Weighs

Risk aversion impacted MENA private equity deals, with transactions falling 38% year-on-year to 29 in the first half of 2025, the third such consecutive half-year fall.

The total value of MENA private equity deals also declined 11% YoY to $2.88 billion, indicating a shift towards strategic recalibration, as capital consolidated around fewer, high-value investments, according to data firm Magnitt.

Private equity deals peaked in 2022 with 102 transactions and $8.33 billion in deal value, before declining in 2023 and 2024.

Farah El Nahlawi, Research Department Manager at Magnitt, attributed the decline to a more “selective deployment approach”, as General Partners shifted focus to backing “scale-ready platforms with stronger fundamentals”.

“With exit pathways uncertain and LPs [Limited Partners] cautious, capital is reserved for mature, de-risked assets,” El Nahlawi told Zawya. “This comes in line with a rise in $100 million plus deals and the decline in volume. Firms are targeting scalable companies with proven models, prioritising control and visibility over early growth bets.”

The MENA region’s PE recalibration is being led by scale-ready SMEs and high-conviction strategies, not withdrawal.

“After a couple of years in the market, many SMEs across the region are no longer early-stage. They’re scaling organically, becoming profitable, and showing clearer value creation plans. That growth is attracting naturally larger ticket sizes as investors back more established, platform-ready businesses,” El Nahlawi said.

MENA figures were aligned with global trends where investments are being made into high-value, control-oriented transactions.

According to S&P Global, global deal value rose 18.7% YoY in H1’25, despite a 6% drop in transactions.

Saudi leads

With 13 transactions, Saudi Arabia led the region in PE deal count, up 8% YoY and accounting for 45% of MENA’s total, reflecting sustained local investor engagement, Magnitt said.

Although, in terms of deal value, Saudi had a more favourable H1 period last year with the Telecom Tawal PE deal at $2.3 billion.

The UAE came second in H1 with 12 transactions, representing 41% of total transactions, while also dominating in value.

According to El Nahlawi, sustainability company PAL Cool Holding closed the biggest PE deal of the period, at a value of $1.04 billion.

While Saudi and the UAE were in close competition, the composition of investors between the countries differed widely.

While 12 of 13 transactions in Saudi involved locally based investors, signalling a strong domestic momentum, eight of the UAE’s 12 transactions were led by international investors.

Egypt, Jordan, Morocco and Qatar accounted for the remaining 14% of MENA transactions, with one reported in each country.

Morocco sustainability company OCP Green Water closed a $620 million deal, one of the biggest over period.

SWF deals

Despite fewer deals, H1 2025 saw a record share of mid-to-large ticket sizes. Transactions sized between $500 million and $1 billion accounted for 29%, led by sovereign wealth funds.

“SWFs are allocating more to mid- to large-sized companies that align with national development plans (e.g., infrastructure, healthcare, sustainability),” El Nahlawi said.

“The absence of LBOs [leveraged buyouts] since 2023 underscores a broader shift away from debt-heavy structures,” she added. “Rather than reviving leverage, SWFs appear to be reinforcing a ‘strategic patient capital’ approach, favouring control, alignment with national goals, and long-term value creation over quick returns. GPs are de-risking and are having a tendency towards aligned, sovereign-backed partners.”

According to Magnitt, the first half of the year also saw $1 billion plus deals make up 14% of activity, indicating a five-year high. Syndicated deals also rose, with 80% of the top five transactions involving co-investments between local and international investors.

In contrast, transactions under $50 million dropped to 14% of total transactions, their lowest share on record. The $100 million to $500 million bracket also climbed to 29%, up from 15% in 2024.

“Despite global macro uncertainty, the GCC, particularly Saudi Arabia and the UAE, continues to demonstrate structural strength and investor confidence. Backed by sovereign support, maturing SMEs, and a favourable regulatory environment, the region is poised to anchor future PE activity,” El Nahlawi said.