The scuttled deal that would have put some U.S. port operations in the hands of Dubai Ports World may contribute to sinking global private equity aspirations from the Middle East. Arif Massood Naqvi, CEO of Abraaj Capital, told Reuters that, although private equity in the region is booming – growing at a rate of about 55% a year, according to the news service – the reaction to the port deal has cooled Gulf government-owned companies’ enthusiasm for global investment. “These entities would be investing more and more in the West because there are compelling valuation opportunities,” Naqvi said at a p.e. conference. “The issue is not whether they would invest but whether their capital would be welcome.” The sentiment, says Reuters, is shared among private equity firms, as well, but there is another factor on their collective minds: the current size of the regional p.e. industry. The Mideast is expected to be sitting on an increasingly huge mountain of cash for investing in the near future, but, at the present time, private equity executives say their industry is just too small, a total of $5.2 billion AUM, to compete on a global stage.
