As many as 60 private equity managers in the Middle East are currently seeking around $26bn (Dh95.42bn), with sovereign wealth funds likely to be a vital source, said Swati Taneja, Director of the Second Private Equity Forum, which will be held in Dubai on June 22-26.
"The funds of the Arabian Gulf are now a crucial source of capital and liquidity, as much of the rest of the world copes with slower economic growth," said Taneja. "The sovereigns are also taking a longer view than banks, and wealth fund partnerships are now one of the major driving forces behind the dramatic growth in the Middle East's private equity, with a total of more than $13.3bn under management," she said.
The total assets of sovereign funds are estimated by Private Equity Intelligence (Preqin) at more than $3trn, with Middle East investors the largest regional grouping, accounting for more than 40 per cent of all wealth fund capital.
As worldwide economic growth slows down, the cash-rich private equity sector in the booming Middle East economies is becoming vital for the world of sovereign wealth funds, according to financial experts.
The partnership between the multi-billion dollar world of sovereign wealth funds and the Middle East private equity sector is growing closer and stronger, as a result, she said.
Preqin, in a recent report, said sovereigns are also busy buying direct stakes in some of the world's largest private equity organisations.
China Investment Corporation recently bought a $3bn stake in Blackstone of the US. Mubadala Development Corporation spent $1.3bn on a stake in the Carlyle Group. And the Abu Dhabi Investment Authority has a stake in another US equity firm, Walden Capital.