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This week we dive into the evolution of private equity in the Middle East with investors increasingly targeting high-growth sectors such as technology, healthcare, and industrials

A new study reveals that sellers, including pension funds and endowments, typically face an average 13.8% loss when liquidating positions.

The Asia Pacific credit market is evolving as non-bank lenders gain traction, particularly in India, Japan, Thailand, and Singapore, offering alternative financing solutions and expanding private credit opportunities.

Narrowing valuation gaps are emerging as the most significant driver of transaction volume in growing private equity deal flow.

— P.E. 150 Team

Table of Contents

• Data Dive

• Trend of the Week

• Liquidity Corner

• Deal of the Week

• Private Credit

• Macro View

• This Week in History

• Interesting Articles

• Tweet of the Week

Beyond Oil: The Evolution of Private Equity in the Middle East

Private equity (PE) and venture capital (VC) activity in the Middle East is experiencing a dynamic shift in 2024, with investments increasingly targeting non-oil sectors such as technology, healthcare, and industrials.

While overall deal values remain below the peaks of previous years, there is a clear push towards diversification, aligning with regional economic transformation efforts led by countries like Saudi Arabia and the UAE. 

Sectoral analysis reveals a strong preference for technology, media, and telecommunications (TMT), which leads in both deal volume and investment value. Healthcare and industrials are also emerging as high-priority sectors, reflecting the Middle East’s focus on innovation and infrastructure development. Meanwhile, startup funding, which saw record-breaking highs in 2022, has cooled due to tighter global financial conditions, though long-term growth potential remains strong.

On a country level, the UAE and Saudi Arabia continue to drive the majority of deal-making, supported by pro-business policies and economic diversification initiatives.

Egypt, which once outpaced both in deal volume, has seen a notable decline due to economic headwinds and investor caution. The report also highlights a growing preference for smaller, lower-risk deals and an increase in undisclosed transactions, pointing to a more strategic and selective investment approach.

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Trend of the Week: PE-Driven Deal Activity Poised for Acceleration

PE deal flow is set to surge, with narrowing valuation gaps emerging as the most significant driver of transaction volume. As bid-ask spreads tighten, buyers and sellers are finding common ground, clearing the way for increased deal activity. This shift underscores a recalibration in market expectations, where assets that had been held back due to pricing mismatches are now moving toward execution.

Beyond pricing alignment, the increased quantum of assets coming to market from PE funds is another key accelerant. With exit timelines stretching in recent years, GPs are now looking to recycle capital, spurred by stronger macro visibility and the need for liquidity events. This wave of assets, coupled with falling interest rates, will likely reinvigorate both secondary and primary market transactions.

Further fueling optimism is regulatory tailwinds and easing macro uncertainty, particularly in the U.S. While shifting political dynamics remain a wildcard, the anticipated relaxation of certain policies under a new administration could create a more favorable dealmaking environment. With spreads compressing and dry powder still abundant, expect PE firms to move quickly on high-quality assets as conditions improve.

Private Equity’s Secondary Market: The House Always Wins

Selling private equity stakes on the secondary market is like paying a cover charge just to leave the party early. A new study finds that sellers—often pension funds and endowments—take a hit of 13.8% on average when offloading positions. The biggest winners? Buyers, who typically outperform sellers by five percentage points annually.

Secondary transactions spike when liquidity is tight, with discounts widening in downturns. And while NAV-based pricing has its flaws (cue the creative accounting), alternative measures like Public Market Equivalent (PME) confirm that sellers still leave money on the table.

Bottom line: The secondary market is a necessary outlet for liquidity-starved investors, but at a cost. And like any market with asymmetric information, the ones willing to buy are usually the ones getting the better deal.

Deal of the Week: Brookfield’s $1.7B Renewables Power Play

This move is particularly timely, as developers in the U.S. navigate regulatory uncertainty under a shifting political climate. While former President Biden’s Inflation Reduction Act supercharged clean energy investment, President Trump’s return has sparked concerns about renewable tax incentives. However, with onshore projects largely shielded from executive action, Brookfield’s bet looks strategic rather than speculative—leveraging stable demand and bipartisan state-level support for renewables.

For National Grid, the sale is part of a broader $8.6 billion capital-raising program, as it refocuses on core operations, including power and gas networks serving over 20 million people in New York and Massachusetts. Meanwhile, Brookfield continues to position itself as a global renewable powerhouse, following last year’s $2.2 billion investment in U.K. offshore wind farms. In a sector where some are retreating, Brookfield is leaning in—and making its mark as one of the most influential players in the clean energy transition.

The Rise of Non-Bank Credit in Asia Pacific

The Asia Pacific credit landscape is shifting, with non-bank lenders playing an increasingly important role in key markets. While traditional banks still dominate, particularly in Mainland China (85%) and New Zealand (85%), there’s a clear trend toward diversification. India stands out, where 41% of credit now comes from non-bank sources, signaling a deepening private credit market and growing appetite for alternative lending solutions.

As global liquidity dynamics evolve, non-bank credit is becoming a vital funding source, especially in Japan (33%), Thailand (31%), and Singapore (31%)—markets historically reliant on bank financing. This shift reflects increased demand for more flexible, tailored financing solutions beyond traditional bank lending. PE firms, credit funds, and institutional investors are stepping in to bridge the gap, driving a more sophisticated private lending ecosystem across the region.

For investors, this trend presents both opportunities and risks. The rise of non-bank credit unlocks new dealmaking avenues in structured finance, mezzanine debt, and direct lending. However, it also signals potential vulnerabilities—higher exposure to credit risk outside of regulated banking channels. As Asia Pacific credit markets mature, expect non-bank lenders to play an even bigger role in private debt, distressed assets, and corporate financing solutions in the years ahead.

The Monetary Base: A Post-2008 Rollercoaster

For decades, the U.S. monetary base moved at a steady crawl—Vietnam? Nixon Shock? Barely a bump. Then came 2008, and the Federal Reserve hit the money printer like it was a broken arcade game.

The financial crisis triggered an unprecedented liquidity injection, ballooning the monetary base from ~$850 billion to nearly $2.1 trillion in just a few years. That was just the beginning. The response to COVID-19? Another vertical spike, pushing the total past $6 trillion.

What’s striking isn’t just the massive expansions but the instability since 2008. Gone are the days of smooth growth—now, the monetary base jerks up and down like a stock chart of a meme coin. The post-2008 era has cemented a new normal: when markets wobble, the Fed steps in with the firehose. The real question? What happens when it stops.

This Day in History: The 1993 World Trade Center Bombing (February 26, 1993)

At 12:17 PM on February 26, 1993, a massive explosion ripped through the underground parking garage of the World Trade Center, shaking lower Manhattan to its core. The blast left a 100-foot-wide crater, killing six people and injuring over 1,000 others, while smoke and fire engulfed the towers. In an instant, terrorism had arrived on American soil, marking the first attack on the Twin Towers—a chilling prelude to what would come eight years later.

The FBI and law enforcement quickly mobilized, piecing together clues from the rubble. A vehicle identification number on a damaged van led investigators to Mohammad Salameh, who unknowingly sealed his fate when he attempted to retrieve his $400 rental deposit. One arrest led to another, and soon, four suspects were in custody, their bomb-making materials and cyanide stockpile uncovered. But the true mastermind, Ramzi Yousef, remained at large, continuing to plot attacks from abroad.

Two years later, Yousef was captured in Pakistan and returned to the U.S. to face justice. But his plan had been even more sinister—he had intended for the explosion to topple one tower into the other, an eerie foreshadowing of 9/11. With his uncle, Khalid Sheikh Mohammed, later orchestrating the 2001 attacks, the 1993 bombing stands as a grim warning of the rising tide of global terrorism and a moment that changed national security forever.

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