Private equity firm Gulf Capital is looking to invest $500 million in Saudi Arabia, the United Arab Emirates and Egypt, the company's chief executive said on Monday. The opportunities include a deal in the healthcare sector that would be announced soon, Chief Executive Karim El-Solh told Reuters on the sidelines of a private equity conference. He declined to give more details, but said in general the fund targets 10 deals of about $50 million per deal. As elsewhere in the world, private equity activity in the Middle East in 2009 has dropped significantly, Solh said. As a result, the sector sits on more than $11 billion and the number of deals is set to increase again. “With so much dry powder left, regional private equity firms are under considerable pressure to close transactions,” he said, adding that the crisis will eventually result in a shake-out of the industry. Separately, venture capital investments in technology and media are on the rise. “With more than half of the assets under management in regional private equity (PE) companies still un-invested, a limited number of deal flows and an overly-cautious capital, post-crisis survival will be challenging to many,” according to El-Solh. “However, the sector continues to grow in the GCC despite the current difficult economic climate. In fact, the fundamentals that contributed to its growth are as valid today as they were a couple years ago,” he said. “Many funds that adopted strategies that were only successful in an environment of stellar growth will not be able to survive in the downturn. Hence, the crisis will shake out the industry and reduce the number of players slowly over time. For the rest, competition will be tougher than ever,” he further said. On the fundraising side, only two funds were successfully raised this year.
