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On the deal front, the Middle East was a rare “bright spot”, supported by government initiatives, strong GDP growth forecasts and attractive risk-adjusted returns, a report said.
Leading corporate finance advisory firm Lumina said LPCI’s overall increase from 6.2 times to 6.6 times reflected a resilient M&A deal environment as traditional sectors such as manufacturing, oil and gas services and industrials showed strong levels of activity. Middle East and UK transactions, in its latest quarterly report, “The Lumina Private Company Index (“LPCI”) Q3 2022″.
Consolidation in the construction and contracting industry is picking up pace, with the region announcing substantial infrastructure spending, with the aim of developing regional champions with the specialized skills to service projects of increasing size and complexity.
Capital flow
Meanwhile, a weak British pound and demand for capital in the U.K. and Europe means Lumina increasingly sees a two-way avenue for capital flows between the Middle East and Europe. Another major trend is the significant increase in capital deployed to the region as multinational corporations and funds seek to “go on the ground” and identify direct regional investments.
The slowdown in the global tech sector has led to a significant reduction in funding rounds for tech companies as the impact takes root in the Middle East. Funding is still available to deep tech, artificial intelligence, digital transformation, cybersecurity and other technology creators, however.
George Traub, Managing Partner at Lumina, commented: “The key investment themes in 2023 will prioritize a preference for investment yield and structural returns over capital stock in an environment of rising interest rates and inflation. We also expect, Special situation private equity funding will pick up significantly as the IPO boom provides exits for family businesses and private equity, bailout funds and secondary strategies.” — trade arab news agency
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