Saudi Arabia's Private Equity Landscape Flourishes with $4BN Transactions in 2024
Mita Srinivasan
10x Industry

Saudi Arabia's Private Equity Landscape Flourishes with $4BN Transactions in 2024

MAGNiTT is expanding into Private Equity as a vertical in the coming year starting with this report on Saudi Arabia. The report explores the remarkable growth and strategic shifts in the investment landscape in industry hotspots like food & beverage and healthcare.

Saudi Arabia's private equity (PE) market has shown remarkable growth, closing 2024 with over $4BN in transactions. The Private Equity landscape has displayed consistent growth since 2020, experiencing a substantial 3.7X rise in 2021 and further catapulting to 5.9X its 2021 level in 2022.

The recently released MAGNiTT Private Equity Report for Saudi Arabia, a collaboration between MAGNiTT and Saudi Venture Capital Company (SVC), sheds light on the dynamics and direction of this burgeoning market.

Philip Bahoshy, CEO of MAGNiTT, emphasized the organization's role in providing credible market insights. "After years of delivering credible market research and real-time insights on the venture capital ecosystem of the region, MAGNiTT is now proud to inch a little closer to the private equity landscape within the markets we cover. And we're even more delighted to be stepping into that direction with our inaugural Private Equity report for Saudi Arabia with our longstanding partners at SVC. This report highlights the pivotal role of private equity in shaping the financial landscape of the Kingdom while offering insights on industries and leading players within the space."

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The top five PE investments, executed between 2021 and 2023, played a pivotal role, capturing a significant 76 percent share of the total investment. These transactions spanned Manufacturing, Financial Services, Healthcare, and Telecommunications, underscoring the strategic focus and diversification within the Kingdom's Private Equity landscape.

The composition of PE transactions has undergone significant shifts, particularly with a pronounced emphasis on Buyout transactions. Between 2020 and 2023, Buyout transactions witnessed a 20-percentage point increase in their share of the total, while concurrently, Growth transactions saw a rise of 2 percentage points over the same period. Across the last five years, Buyout transactions have dominated the PE investment landscape, capturing an average of 80 percent of the total capital deployed in this space.

This trajectory underscores the evolving dynamics and the increasing prominence of Private Equity within the Kingdom's financial ecosystem, reflecting a strategic shift in investment preferences. Ammar Alkhudairy, Chairman of SVC, credits the Kingdom's robust growth to the alignment of government initiatives under Saudi Vision 2030 and active engagement from the private sector.

These trends mirror the maturation of Saudi Arabia's PE market, aligning seamlessly with the national goal of economic diversification. The report offers a compelling narrative for global investors, showcasing Saudi Arabia as a land of strategic investment opportunities and a beacon of economic growth.

Experts believe this growth indicates the maturation of the Saudi PE market, aligning with national strategies to diversify the economy. This surge in private equity activities offers a compelling narrative for global investors, presenting strategic opportunities within Saudi Arabia's evolving economic landscape.