Private capital hasn’t frozen in MENA — but the exit playbook could change if the war drags on

The conflict in the Gulf hasn’t yet killed investment momentum for private equity and venture capital in the Middle East and North Africa. However, if the conflict drags on much longer, it could reshape how and where the region’s PE and VC-backed companies find their way to market — and slow the pace at which earlier-stage companies are raising capital.

The trend on exits was already clear before the drones and F-35s started flying: Portfolio companies backed by private capital — the private equity and venture capital firms that invest in businesses with a view to eventually selling or listing them — were turning more and more frequently to local exchanges for exits rather than making what had been the traditional one-way flight to London or New York.

The numbers speak for themselves: Public-market exit values for PE and VC-backed companies globally hit USD 38.2 bn in 2025, up 21% y-o-y, according to a new report (pdf) by the Global Private Capital Association (GPCA). In the Middle East (excluding North Africa), those exits jumped 179% to USD 626 mn.

Here’s where things stand one month into the conflict:

#1- Investors are still writing checks. There’s no evidence (yet) of significant investor pullback from capital calls — the periodic capital transfers that PE and VC investors commit to sending when a fund they’ve backed needs the money. That suggests portfolio companies that have already raised capital aren’t in immediate danger of being starved of the funding they were promised. It also says something about sentiment — limited partners backing PE and VC firms aren’t tapping the brakes.

#2- Dealmaking by PE and VC firms is slowing. The conflict has brought a “pause or a slower pace in new investments,” GPCA Research Director Jeff Schlapinski tells EnterpriseAM. The war could change where investors write tickets, though: “Everyone will be closely looking at logistics, shipping developments, and energy markets as we progress through the year, but there is no evidence to suggest a pullback so far,” he added.

International investors will likely be the most cautious, regional startup information service Magnitt said in a recent report. Transaction timelines will also lengthen, as will exits, Shorooq founding partner Shane Shin tells us.

#3- Valuations will be under pressure. “The market is becoming more price-sensitive but also increasingly structured,” Shin said, while highlighting that this trend started even before the war. “Investors are asking for clearer milestones, better terms, and in some cases staging capital

more carefully,” he explained. Still, he argues that the “strongest businesses” are not necessarily seeing major valuation compression; rather, in uncertain markets, “capital tends to concentrate around category leaders with strong traction, solid governance, and clear revenue visibility, while others may struggle to sustain prior expectations.”

The most vulnerable companies are those that are capital-intensive, highly dependent on external financing, or have long payback cycles and heavier infrastructure dependencies, he added. Later-stage startups will also be exposed, given the already existing dearth in follow-on investments and late-stage capital, he noted.

#4- The strongest companies are still plotting local listings. Saudi quick-delivery unicorn Ninja is testing IPO waters despite the war, gauging investor appetite for a Tadawul main market listing in late 2026 or early 2027. Ninja is looking at Tadawul, not the NYSE, to open the exit gate for investors: The Saudi exchange has held up better than most regional bourses since the conflict started, with strong oil prices propping up energy heavyweights.

SOUND SMART- Morocco, not Tadawul or DFM, is the breakout story: The Casablanca Stock Exchange (CSE) has emerged as the biggest exit success for private capital in the MENA-Africa space. CSE is now the second-largest exchange in Africa with an aggregate market capitalization exceeding USD 106 bn, and in 2025, it hosted some of the region’s most successful PE-backed IPOs. Fintech outfit CashPlus was 65x oversubscribed, while Morocco’s largest private healthcare provider Akdital reached a EUR 2 bn valuation after listing.

“The CSE is entering a very promising phase supported by a strong and increasingly sophisticated ecosystem — including an active regulator, a growing institutional investor base, research coverage, and the increasing participation of private equity firms,” Albert Alsina, founder of Mediterrania Capital Partners, said in the GPCA report.

Why go local?

The economics are shifting. Western exchanges like the NYSE require massive enterprise value to justify a listing, Schlapinski tells us. The compliance burden alone can be punishing — a lesson the region learned the hard way with Swvl, the Egypt-born mobility startup that listed on Nasdaq via a SPAC at a USD 1.5 bn valuation in 2022 and promptly lost 99% of its value. Four years on, Swvl is still fighting delisting warnings. The Cairo-to-Dubai-to-New York path didn’t deliver.

And listing closer to home attracts a type of investor that already understands what it means to be an emerging-markets player. “The advantage of local listings like Casablanca is that investors there are more likely to understand the business story,” Schlapinski explains. Local investors know the market, the regulatory environment, and the competitive landscape in a way that generalist funds in New York simply don’t. EM specialists, simply put, don’t spook as easily.

Companies in Saudi and the UAE look likely to remain the prime targets for private capital this year. “When we look at the GCC and MENA specifically, the vast majority of targets for private capital are in Saudi Arabia and the UAE. We do see some investments in Oman, but it’s a relatively smaller scale of activity,” Schlapinski said.

What to watch

Markets around the world are focusing more and more on ‘local’ capital. “We see an increased focus on local capital investing at home and an increased focus on local resilience and independent means of production everywhere in the world,” Schlapinski says.

Markets with strong domestic investor bases, like India, are better positioned to maintain transaction momentum even as international capital turns cautious. “A lot of the strong public market activity in India is driven by local investors, not so much international capital, so it should remain relatively strong. In the near term, a cautious approach will prevail until energy markets stabilize again,” he notes.

The implication for MENA: The exchanges and markets that have built deep local investor pools — like Tadawul and Casablanca — are the ones most likely to see PE and VC-backed listings resume first when the war fog clears. The UAE could follow suit, but it will require significant liquidity injections (openly or not) by sovereign funds, we think.

BACKGROUND- The Global Private Capital Association, founded in 2004, is a nonprofit membership organization representing private investors managing portfolios of over USD 2 tn worldwide, with a focus on emerging markets.

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