Private equity funds raised in key Islamic economies drop 5.7% in 2019 - study
Private equity funds raised in key Muslim-majority economies dropped 5.69% to $1.607 billion last year compared to 2018, according to numbers from alternative assets data provider Preqin.
Preqin on January 10 released its annual study of PE funds raised globally, putting the number down as $595 billion, a drop from $628 billion in 2018.
“Competition is unlikely to abate in 2020 – at the start of the year there are over 3,500 funds in market, collectively seeking $926bn,” said Preqin in a statement.
“The investor outlook for private equity is positive, so capital will continue to flow into these funds in the months ahead,” the company added.
| PRIVATE EQUITY FUNDRAISING 2015-2019, 17 Muslim-majority countries | ||
|---|---|---|
| YEAR | No. of funds closed | Aggregate Capital Raised ($ bln) |
| 2015 | 17 | 0.9 |
| 2016 | 18 | 2.3 |
| 2017 | 15 | 1.2 |
| 2018 | 14 | 1.7 |
| 2019 | 12 | 1.6 |
| Data source: Preqin | ||
UAE LEADS
With the exception of 2018, UAE leads PE funds raised in 17 key Islamic markets for the five-year period starting 2015, according to Preqin data.
The GCC country attracted $531 million in 2015, $1.439 billion in 2016, $694 million in 2017, $472 million in 2018 and $1.246 billion last year.
For 2019, Indonesia is second with $274 million, Malaysia trails with $72 million and Pakistan $15 million.
The 17 key Muslim-majority countries Salaam Gateway considered were Saudi Arabia, UAE, Bahrain, Kuwait, Oman, Qatar, Indonesia, Malaysia, Brunei, Egypt, Jordan, Iran, Turkey, Pakistan, Bangladesh, Sudan, and Kazakhstan.
For 2018, Preqin tracked nine of these countries raising a total of $1.704 billion, led by Saudi Arabia’s $500 million, and followed by $472 million for the UAE, $200 million for Bahrain funds, $194 million for Turkey, $100 million each for Egypt and Pakistan, $82 million for Malaysia, $54 million for Indonesia, and $1 million for Kuwait.
Data for 2015 to 2019 shows peak fundraising was the $2.262 billion raised in 2016 from 18 funds closed, followed by 2018 and 2019 in third.
SHARIAH-COMPLIANT FUNDRAISING
Preqin also tracks Shariah-compliant PE fundraising, revealing that only $0.05 billion were raised in 2019, down from $0.55 billion in 2018.
|
SHARIAH-COMPLIANT PRIVATE EQUITY FUNDRAISING 2015-2019, 17 Muslim-majority countries |
||
|---|---|---|
| YEAR | No. of funds closed | Aggregate Capital Raised ($ bln) |
| 2015 | 3 | 0.27 |
| 2016 | 1 | 0.32 |
| 2017 | 3 | 0.19 |
| 2018 | 4 | 0.55 |
| 2019 | 1 | 0.05 |
| Data source: Preqin | ||
INVESTMENT IN ISLAMIC ECONOMY COMPANIES
Preqin data does not break down investments in Islamic economy companies but DinarStandard, the parent company of Salaam Gateway, said in a report released in November that $1.2 billion were pumped into these firms in the twelve months to end-July 2019.
The growth strategy research and advisory firm identified 63 deals across 18 countries, it said in the State of the Global Islamic Economy 2019/20 report.
| ISLAMIC ECONOMY INVESTMENTS, 12 months to end-July 2019 | ||
| No. of deals | Value ($000s) | |
| By sector | ||
| Halal products | 42 | 652,290.56 |
| Islamic finance | 14 | 508,400.27 |
| Islamic lifestyle | 7 | 41,744.50 |
| By investor type | ||
| Corporate | 37 | 962,336.69 |
| Private equity | 10 | 159,678.05 |
| Venture capital | 10 | 73,874.25 |
| Angel investment | 6 | 6,546.33 |
| TOTAL | 63 | 1,202,435.33 |
| Data source: State of the Global Islamic Economy 2019/20 report | ||
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