Does Abraaj deal truly reflect a revival?

As reported everywhere, Abraaj Capital, an investment firm specializing in private equity investments in the Middle East, North Africa and South Asia (MENASA) region which was the first pure PE firm

to be licensed by the Dubai Financial Services Authority (DFSA) to operate out of Dubai International Financial Centre (DIFC) and is considered extremely well capitalized (issued share capital of $1b), will take a minority stake in Nasdaq Dubai-listed and government-run port operator DP World. But is the deal more a sign of, as FT writes, “revival in the moribund regional private equity market”, or a reflection of the government’s increasingly desperate need to reduce its debt?

As for Abraaj, it plans $2b worth of deals this year as it looks to benefit from lower valuations across the Middle East, North Africa and Asia.

“I think DP World needs liquidity,” said Middle East Financial Brokerage Company general manager Samer Al Jaouni. “We were expecting that we start seeing some deals, some big acquisitions in the region. It’s time for bargain hunters to get into the market, and the big companies need cash,” he said.