MENA PE activity cools down in 1H 2025 — but it’s mostly good news amid signs of a maturing market -Magnitt

Private equity dealmaking in the region took a dip in 1H 2025 as investors recalibrated to focus on bigger transactions with strong fundamentals. Some 29 private equity transactions worth USD 2.9 bn were recorded in the first half of the year, marking a 38% y-o-y decline by count and an 11% drop in value, according to Magnitt’s 1H MENA PE report. This is the third consecutive half-year of cooling PE activity in the region.

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General partners are adopting a more risk-averse stance, pivoting toward fewer, higher conviction transactions on scale-ready platforms with strong fundamentals, according to the report. This explains why the y-o-y drop in PE transaction value is less significant than the decline in volume.

PE transactions in the region skewed larger, with the two biggest size brackets hitting five-year highs in 1H. Transactions in the USD 500 mn to 1 bn range accounted for 29% of total volume, and 42% of total value, while those over USD 1 bn comprised 14% of the count and 36% of the overall value. Smaller buyouts (under USD 50 mn) fell to a record low of 14%, while the USD 100-500 mn bracket nearly doubled y-o-y to 29% of total PE activity by count, and 18% by value. The report does not provide comparative figures for 1H 2024, only the whole of 2024.

The slowdown reflects a strategic recalibration in the region’s PE market rather than a retreat. “The MENA region’s PE recalibration is being led by scale-ready SMEs and high-conviction strategies, not withdrawal. The growing dominance of USD 100 mn+ transactions signals a maturing landscape ready to absorb larger pools of capital,” Magnitt Research Department Manager Farah El Nahlawi said in a statement (pdf) accompanying the report.

Growth capital and buyout transactions were nearly evenly split in 1H, with growth transactions slipping to 52% of total activity as buyouts gained ground despite tighter credit markets, El Nahlawi told EnterpriseAM. The trend points to investors favoring plays where they can take a more hands-on role in operations and actively drive value creation, aiming for exits via trade sales or strategic mergers, she added.

SOUND SMART- Growth transactions involve minority investments in established but expanding companies, providing capital to fuel new markets, products, or acquisitions without taking control. Investors rely primarily on the company’s organic growth for returns, with exits typically via IPOs or secondary sales. Buyouts, by contrast, involve acquiring a majority or full stake, often using leverage to gain operational control, drive restructuring or efficiency improvements, and create value through active ownership. While growth transactions are about accelerating expansion, buyouts are about taking charge to unlock value and position the business for strategic sales or mergers.

The period also saw a rise in syndicated transactions, with four of the top five PE plays involving co-investments between local and international investors. These co-investments are enabling deeper due diligence, better risk-sharing, and stronger operational oversight, El Nahlawi said. She explained that partnerships between global funds and local players are leading to tighter valuation discipline and more sophisticated transaction terms, including performance-linked earnouts and tiered exit provisions, as foreign investors balance protection with access to local market expertise.

This trend is likely to continue, with more structured transactions with performance-based earnouts or tiered exit mechanisms, as “global funds seek protection while leaning on local expertise to navigate the region’s complexity,” El Nahlawi added.

KSA bucks the PE downturn: Combined, Saudi Arabia and the UAE captured 86% of all private equity activity in the region. KSA was home to 13 transactions in the first half of the year, up 8% y-o-y, accounting for the lion’s share (45%) of total activity in the region, supported by local investor appetite. The UAE recorded 12 transactions (41%) over the same period, down 25% y-o-y, with more capital flowing in from international buyers. Egypt (down 89%) and Jordan (down 50%) each saw one transaction in 1H.

Sustainability and fintech emerged as standout sectors in 1H, with sustainability-related transactions accounting for 57% of disclosed funding, fueled by large transactions tied to energy transition initiatives, El Nahlawi told us. These sectors combine scale potential with strong alignment to regional policy priorities, making them prime targets under today’s selective capital deployment, she said. SMEs outside this scale-ready bracket face a widening funding gap, as smaller ventures without clear exit routes or policy backing may struggle to draw investor interest unless supported by accelerators, development funds, or niche positioning, she added.

THE CLOSING BELL-

The EGX30 rose 1.0% at Thursday’s close on turnover of EGP 4.2 bn (17.1% below the 90-day average). Local investors were the sole net buyers. The index is up 15.0% YTD.

In the green: GB Corp (+4.9%), Beltone Holding (+4.7%), and Rameda (+4.2%).

In the red: Edita (-2.0%), Abou Qir Fertilizers (-0.6%), and Orascom Construction (-0.3%).

CORPORATE ACTIONS-

Act Financial’s general assembly approved paying out EGP 200 mn in dividends to shareholders for its 2024 earnings at EGP 0.18 a share, according to an EGX disclosure (pdf). The dividend will be funded through the company’s retained earnings.