DUBAI, (Reuters) – Private equity activity in the wider Middle East region in the near future will be especially strong in Saudi Arabia and Turkey, a top executive of The Carlyle Group said on Tuesday.
“The Gulf is not only a source of capital, I think it will be a source of dealflow,” said David Rubenstein, co-founder and managing director at Carlyle, one of the world’s biggest private equity players.
“I suspect in Saudi Arabia more deals will be done.”
Rubenstein was speaking at the Super Return conference, the annual gathering of the private equity industry in Dubai.
Rubenstein’s comments reflect the general mood among private equity specialists about growth opportunities in Saudi Arabia, the Arab world’s largest economy.
Oil-rich Saudi Arabia is attractive to investors because of its fast-growing population, the potential of thousands of family-owned businesses and the government’s large-scale investment plans in transport and infrastructure.
Rubenstein also singled out Iraq, which in coming years could become a more important investment target.
“As the economy recovers from the war you’ll see more capital flowing in,” he said.
Capital to invest in the Middle East will mostly come from local investors, followed by Europe and Asia, Rubenstein said, adding that American capital is unlikely to find its way here.
Rubenstein expects sovereign wealth funds to play a more regional role.
“There will be more political pressure on sovereign wealth funds to invest in the region,” he said.