With liquidity no longer a key constraint for the region's private equity players, experts told Emirates Business that now is the ideal time for the sector to invest in a range of high-growth economic areas.
Rami Bazzi, Senior Executive Officer, Injazat Capital Limited, said:?"Cash-rich PE firms in the region are actively looking to deploy their capital ahead of a full economic recovery.
"Given the industry's long-term investment horizon, this is an ideal timing for deployment across several promising sectors," he said.
Tamer Makary, Executive Director of Arqaam Capital, said: "I don't think it [liquidity] is a constraint right now. It's just that people are being more methodical about spending their capital.
"They are being wiser about how they put their capital to use, which is a fantastic progression in the market."
However, according to Bazzi, fund-raising will not be as easy as it was during the boom years.
"Fund-raising will continue to be a challenge in 2010. Investors' focus will be on differentiated investment strategies and fund managers with successful track record. We are seeing an enhanced deal flow in 2010 as the buyer-seller value gap continues to narrow down. Both sellers and investors are adjusting their expectations to market reality, which should result in increased investment activity."
According to Makary, there was already an increase in cross-border transaction in the first two months of this year. "There's certainly been an increase in transactions. For example, a lot more eyes are on eastern assets because of the economic downturn. There are opportunities from Indian and East Asian buyers who are looking into the Middle East," he said.
Makary is also upbeat about Dubai's role as a regional capital hub, which according to some has been impacted by the economic downturn.
"I think it's [Dubai] very much a bridge for business and a place where people come together for business to serve other markets. I think on the contrary, the UAE as a whole will continue to grow in that aspect and will be supported by the other Gulf States," he said.