A decade ago, every conversation about private equity decisions ended with the same question: can we get out? Today, the focus is on how to grow, improve and exit well.
Initial public offerings are now a realistic option, especially in Saudi Arabia, and the UAE’s exchanges are also building credible pipelines. Trade sales, secondary transactions and consolidation deals are common.
There were 271 mergers and acquisitions (M&A) deals in the Middle East in the first half of 2025, up from 228 the previous year, according to LSEG data. The UAE led by the number of such deals – evidence of growing confidence and experience among buyers and sellers.
These numbers reveal how private equity is moving from the margins to the mainstream across the Gulf. This transformation reflects deliberate policy, market maturity and stronger domestic capabilities.
The Dubai International Financial Centre and Abu Dhabi’s financial centre ADGM reported strong growth in the first half of the year to reach 7,700 and 2,972 active companies, respectively. Together, they have made the UAE the region’s operating base for private capital.
As a result, capital markets are more active, exit routes broader, and investors can now pair equity with private credit to bridge valuation gaps and close deals with greater confidence. The centre of gravity is shifting from fly-in fundraising to on-the-ground deployment.
From capital to capability
Sovereign and quasi-sovereign institutions remain at the core of this story, but their roles are evolving as they continue to anchor strategies and set direction in priority sectors such as AI infrastructure, logistics, health care, education and food security. At the same time, they are increasingly ready to monetise mature holdings and use IPOs and secondary sales to deepen domestic markets. Saudi Arabia led Gulf Co-operation Council IPO proceeds in the first half of this year, said Markaz, while the UAE’s pipeline of listings is expanding steadily.
The financing toolkit has also matured. The DIFC and ADGM now have dedicated frameworks for private credit funds, giving managers more flexibility to combine lending and equity. This reflects the region’s growing comfort with sophisticated financing structures that support execution and deal certainty.
An equally important source of deal flow is the region’s family offices. Many long-established groups are in a critical phase of succession planning, separating ownership from management and building professional governance. As a result, more family-owned firms are opening their doors to minority investors, carve-outs and partnerships with international sponsors – a trend particularly visible in the UAE and now accelerating in Saudi Arabia. New entrepreneurs have been entering the market at an accelerated pace starting tech-enabled businesses, and are increasingly teaming up with regional and global venture and private equity funds, as well as venture debt providers.
Against this backdrop, value creation has become the central theme of private equity in the Gulf. As the market matures, investors are focusing less on financial engineering and more on building resilient, efficient, and globally competitive enterprises.
Across the region, firms are emphasising bottom-line improvement through operational excellence, cost rationalisation and digital productivity, while driving top-line growth through product innovation, regional diversification, and strategic partnerships.
This new discipline reflects the priorities of both investors and sovereign shareholders: to transform portfolio companies into self-sustaining businesses that can compete regionally and internationally, creating long-term economic value rather than short-term returns.
Public-private partnerships are also helping move the region from policy to delivery. The UAE’s Federal PPP Law provides a national framework and the Abu Dhabi Investment Office has enabled Dh2.4 billion ($653.5 million) in projects since 2020, with more in the pipeline.
In Saudi Arabia, the National Centre for Privatisation and PPP is progressing with more than 200 approved projects across 17 sectors. For private equity investors, these programmes offer long duration opportunities with predictable returns and clear policy support.
Outcomes not headlines
Looking ahead, the outlook is positive. Private equity activity has picked up, with $13.8 billion invested across 100 PE deals in the Middle East and North Africa during the first half of this year, putting the region on track for a record year, Pitchbook said.
We expect consolidation in sectors such as food distribution, consumer and retail, and financial services, along with selective monetisation of sovereign assets and steady IPO activity.
If the last decade was about building confidence, the next will be about delivering outcomes. The Gulf has the capital, capability and commitment to do just that – converting opportunity into enduring value.
Ali Anwar and Rami Semaan are managing directors at Alvarez & Marsal in the Middle East
