Saudi Arabia’s private equity sector has emerged as a dynamic and rapidly expanding segment within the Kingdom’s financial ecosystem. The latest ‘2019-2023 Saudi Arabia Private Equity Report’ revealed that Saudi Arabia has witnessed a surge in private equity activity in the last five years, with 2023 activity reaching $4 billion.
Surging investment figures
In its latest report, MAGNiTT, sponsored by SVC, reveals that the private equity landscape in Saudi Arabia has displayed consistent growth since 2020. It saw a remarkable 3.7x increase in 2021 and another 5.9x rise in 2022. Besides, the composition of private equity transactions in the Kingdom has seen a significant shift with substantial emphasis on buyout transactions.
Thus, buyout transactions saw a 20 percent increase in their share of the total between 2020 and 2023. Meanwhile, growth transactions witnessed a growth of 2 percentage points over the same period.
Buyout transactions have emerged as the cornerstone of Saudi Arabia’s private equity landscape, capturing an average of 80 percent of the total capital deployed in these transactions in the last five years. This dominance underscores a strategic shift in investment preferences and highlights the increasing prominence of private equity within the Kingdom’s financial markets.
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Industry dynamics
The report reveals significant transactional diversity and industry concentration within Saudi Arabia’s private equity sector. Notably, food and beverages emerged as the most transacted industry, while manufacturing claimed the top spot in terms of total investment, commanding 46 percent of the capital deployed between 2019 and 2023. These findings underscore the diversified investment landscape and the strategic focus on key industries driving economic growth in Saudi Arabia.
Commenting on the report, Dr. Nabeel Koshak, CEO and board member at SVC, said: “This report represents a significant milestone in our commitment to providing valuable market insights and contributing to understanding the evolving investment landscape in the Kingdom.” He highlights SVC’s commitment to propelling the diverse facets of private capital through strategic investment programs and products tailored to the Kingdom’s ecosystem.
For his part, Philip Bahoshy, CEO of MAGNiTT, said: “This report highlights the pivotal role of private equity in shaping the financial landscape of the Kingdom, while offering insights on industries and leading players within the space.”
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