Investor focus shifts to bigger plays as MENA private equity activity slows in early 2025: Magnitt

Cairo – August 3, 2025: Private equity activity in the Middle East and North Africa region saw a marked slowdown during the first half of 2025, as investors moved away from high-volume dealmaking and instead concentrated capital in fewer, high-value transactions.

According to Magnitt’s latest report, only 29 private equity deals were recorded between January and June, with a combined value of $2.9 billion, representing a 38 percent decline in the number of deals and an 11 percent drop in value compared to the same period in 2024.

The region has now logged three consecutive half-years of cooling PE activity, underscoring a broader shift in investor appetite.

Saudi Arabia remained the most active market, with 13 transactions, up 8 percent year-on-year, making up nearly half of all deals across MENA. The UAE came in second with 12 deals, though this reflected a 25 percent decrease from the previous year. In contrast, Egypt and Jordan each saw just one PE transaction during the period, falling sharply by 89 percent and 50 percent, respectively.

The pullback reflects a strategic recalibration rather than investor retreat, according to Magnitt. General partners are taking a more cautious approach, channeling capital into higher-conviction investments in platforms with robust fundamentals. This selective focus on quality over quantity has helped soften the drop in total value, despite the sharp decline in deal count.

Larger deals have become increasingly dominant, with transactions in the $500 million to $1 billion range accounting for 29 percent of total volume and 42 percent of total value — both at five-year highs.

Deals above $1 billion made up 14 percent of the count and 36 percent of value. Meanwhile, smaller deals under $50 million dropped to a record low of 14 percent. Mid-sized deals in the $100–500 million range nearly doubled in volume from the previous year, accounting for 29 percent of all transactions and 18 percent of deal value.

Growth capital and buyout transactions were nearly evenly split in the first half. Growth investments slightly edged out buyouts, making up 52 percent of the activity. The steady rise of buyouts, however, suggests investors are increasingly drawn to deals where they can take controlling stakes and implement operational improvements to drive long-term value creation.

The first half also saw an increase in syndicated deals. Four of the five largest transactions involved co-investments between local and international players. These partnerships are contributing to deeper due diligence, tighter valuation discipline, and more sophisticated deal terms, such as performance-based earnouts and tiered exit mechanisms.

As global funds seek protection while operating in complex regional markets, collaboration with local investors is proving to be a key strategy.

Sustainability and fintech stood out as the most active sectors by value, with sustainability-related deals making up 57 percent of all disclosed PE funding. This trend was driven by sizable investments in energy transition projects, reflecting both the sectors' scalability and alignment with government priorities. Meanwhile, smaller SMEs not positioned for scale or lacking clear exit pathways continue to face growing funding challenges.