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Citadel Capital eyes Saudi Arabia’s private equity market

Citadel Capital, the Cairo based private equity firm, sees immense potential in Saudi Arabia as the world’s largest oil producer builds a broad based economy and continues to liberalise and modernise its business climate.

The private equity firm, which controls investments of USD8.3bn in 15 industries spanning 14 countries, is looking closely at opportunities in Saudi Arabia.

The firm was founding partner of the Outlook Saudi Arabia—Investment and Private Equity Forum 2010, which took place in Riyadh earlier this week in partnership with the Saudi Arabian General Investment Authority.
 
“Saudi Arabia has long been on the private equity map as a source of funding, but today it has also become a very attractive investment destination,” says Citadel Capital chairman and founder Ahmed Heikal (pictured). “A long-standing commitment to market modernisation and advantageous macroeconomic fundamentals are moving the KSA’s domestic market onto the global stage. Its advantages as an energy rich country, meanwhile, and the government’s commitment to infrastructure build up and other investment support a unique opportunity for private equity investors.”
 
“The challenges of 2009 saw a slowdown in bank credit to the private sector,” adds Citadel Capital managing director and co-founder Hisham El-Khazindar. “This development has created a nascent market for corporate control as well as a rising awareness of both the importance of non-bank financing and of the added-value that world-class private equity players can bring.”
 
Demographic appeal also factors as a significant support to private investment in Saudi Arabia. With a population of more than 25 million growing at an average rate of 2.2 per cent over the past decade, domestic demand and spending are rising rapidly, and consumers are under-leveraged by both regional and global standards.
 
Private equity activity in the Middle East and North Africa has largely been dominated by Egypt, which attracted 24 per cent of industry investments by value in 2009 (excluding Citadel Capital’s USD1bn investment in Egyptian Refining Company), according to industry data. Saudi Arabia, long the region’s largest economy and the world’s largest oil producer, attracted a 17 per cent share of Mena private equity investments.

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