PE & Venture Capital

Private Equity a Sellers Market

Private equity firms are paying an average premium of 45% for European companies in 2021, the highest since the data company Refinitiv started keeping records in 1980. In the US, the premiums hit 42% this year, the highest since 1999. UK-listed companies were taken private at an average premium of 47% this year.

Source: Financial Times, Refinitiv

The Status of UK Fundraising

According to the report by Black Baud, the use of CRMs in the non-profit sector is directly linked to income. Where charities are not using a CRM, they are more likely to only have an income of less than £500k per year. In contrast, the larger and more sophisticated charities using multiple CRMs, for example donor management systems as well as a volunteer management system, can often bring in an annual income of over £5m.

The most important source of income for all charities surveyed is individual fundraising, something not at all unexpected and once again proving just how important the role of fundraiser is to the sector. The majority of Higher Education Institutes responded to say that they rank fees as their highest source of income, whereas in the Arts and Social Care, government grants are the most vital source of income.

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European VC Landscape

London is the capital of lead VCs in European Series A. We focused on the 20 most active lead VCs in European Series A because it is a sizeable sample that covers European Venture Capital Landscape about a third of the initially qualified dataset, and since it would’ve been impracticable to directly engage with more VCs on a round-by-round basis.

This analysis isn’t meant to suggest by any means that a higher volume of investments indicates higher quality, focus, or relevance, but only aims to provide a thoroughly validated historic account of the European Series A landscape between 2014-2018.

A qualified Series A is a disclosed round of >$4m, that was labelled as a Series A or at least not labelled otherwise, and occurred within 7 years from the company’s founding.

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UK start-ups favoured by US, Asian Investors

The UK tech sector has attracted more foreign investment in the first seven months of 2019 than it did during the whole of last year and has overtaken the US for foreign investment, per capita.

Of the top three global tech hubs, the UK attracts nearly as much non-domestic capital as the much bigger China. The UK is ahead of the USA on a per capital basis.The sector is attracting an average of $1bn a month from both foreign and domestic investors – one and a half times the amount raised during the same period last year – making the UK one of the most attractive and dynamic markets in Europe.

Research prepared for the Digital Economy Council by Tech Nation and shows that between January and July this year, UK-based tech firms received a staggering $6.7 billion in funding – with $3.7 billion, or 55%, coming from American and Asian investors thanks to billion-dollar tech companies such as energy supplier OVO Energy and food delivery startup Deliveroo.

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Private Equity 2016 Guide Sector Report

By Suhail Ahmad, Management Consultant and Portfolio Adviser to Hikmah Capital Corp. He can be contacted at [email protected]


With falling crude oil prices, slowing Chinese economy, and a struggling Eurozone, it is no surprise the Private Equity (PE) activity in the Middle East has been challenging. However, despite these headwinds, PE activity overall looked respectable with a strong showing of $2.7 billion in deal value by end of September 2015. However total deals fell by over 50% compared to last year. Perhaps the decline in crude oil prices may have a silver lining for Islamic PE as countries reliant on oil revenue may finally see the benefits of a diversified economy and support regional PE growth to help diversify the region’s economic base.

2015 a Review

According to Al Masah Capital, a total of 24 PE deals worth $2.7 billion were reported as of September 2015 compared to a total of 58 deals worth $285.3 million during the same period in 2014. On the other hand, there were just 5 PE exit deals reported until September 2015 worth $36.21 million, compared to 16 PE exits during the same period in 2014 worth $167.43 million.

If we were to exclude the $2.64 billion deal in Algeria, the total values of deals in the Middle East North Africa (MENA) region were only $34.25 million. The slowdown can directly be attributed to the decline in oil prices and increasing geopolitical uncertainty with civil wars in Syria and Yemen.

Al Masah Capital founder and chief executive officer Shailesh Dash said: “Our experience in market research suggests a pick-up in private equity activity during H2 2015 with stabilization in oil prices especially in consumption-led sectors such as healthcare education retail and food and beverage. The UAE Saudi Arabia Lebanon and Egypt are expected to be frontrunners in private equity activity during the second half of 2015.”

Sectors like IT retail and healthcare followed by telecom financial services industrial manufacturing food and agriculture oil and gas and media observed dynamic movements in private equity during 2015.

Some of the key PE transactions this year include the Dubai International Capital (DIC), the private equity arm of Dubai Holding, announced completion the sale of Almatis, the world’s leading supplier of premium alumina for the refractory, ceramic and polishing industries to OYAK, Turkey’s largest private pension fund. The completion of sale was after receiving all relevant regulatory approvals.

The Abraaj Group was particularly active in the year with its announced acquisition of Yu-Ce Medical, a leading disposable medical supplies manufacturer in Turkey and acquisition of majority stake in Urbano Express, a leading courier and light logistics solutions company in Latin America with operations in Peru, Ecuador and El Salvador. Abraaj Group also announced the final close of its second dedicated North Africa private equity fund at $375 million and brings the total amount raised by Abraaj for the African continent in 2015 to solid $1.37 billion. The funds will target well managed, mid-market businesses in the core geographies of Algeria, Egypt, Morocco and Tunisia.

Its primary aim is to develop investments within local industries, thereby accelerating growth and economic diversification in Qatar through support for private sector.

2016 a Preview

With a strong showing in 2015, Islamic PE growth looks promising next year. The key for Islamic PE to continue growing is the emphasis of the close relationship it has with conventional PE. Particularly the concept of equity ownership, risk sharing, and mutual benefit compared to risk transfer which is still often the case in Islamic banking.

With a focus on development capital rather than leveraged buy-out (LBO) and distressed buy-out transactions, Islamic PE firms can build an attractive risk profile and differentiate themselves better from the conventional PE firms.

A good example is the new private equity offering announced by Qatar Development Bank worth almost $100 million and designed to support Qatari small-medium enterprises (SME). The goal of the fund is to actively contribute to the country’s economic diversification. The term of the SME Equity fund is expected to be up to ten years, five years for deployment and 3-5 years holding period. Qatar Development Bank (QDB) was established in 1997 as the Qatar Industrial Development Bank, a 100% government-owned developmental organization.


Islamic PE no doubt has its growth challenges but considering the increasing awareness of the benefits of PE as a source for economic growth and diversification, the industry needs to capitalize on this aspect to continue charging forward. Only then can Islamic PE be considered a formidable force for job creation and economic development in the Islamic economies of the Middle East and Far East Asia. And attract the significant capital from the Islamic institutional investors (Islamic banks and Sovereign Wealth Funds) to become a vibrant segment of the Islamic finance industry.

This article was first published in the IFN annual guide 2016

Canada’s First Impact Angel Network

“Reason often makes mistakes, but conscience never does.” – Josh Billings

Earlier this week, Canada witnessed first of its kind partnership between government and private sector as Province of Ontario is making it easier for businesses that have a positive social or environmental impact to get funding needed to grow and succeed in the competitive angel investing market.

The province, in partnership with the Network of Angel Organizations-Ontario (NAO-Ontario), is launching the Impact Angel Alliance. The Alliance will encourage more investors to help kick-start promising, high-growth social ventures in Ontario. This will be Canada’s first impact investing angel network.

The Alliance will work with NAO-Ontario to:

  • Raise awareness of social ventures among established angel investor groups.
  • Help diversify angel group membership to help bring in more women, visible minorities, and new Canadians.
  • Bring together angel groups and non-traditional funding partners to increase co-investment into social ventures in priority areas, such as community health and sustainable craft industries.
  • Research emerging trends, challenges and opportunities in impact investing to reduce risk, save time and attract better opportunities.

Supporting investment in businesses that have social or environmental benefits is part of the government’s plan to build Ontario up. The four-part plan includes investing in people’s talents and skills, making the largest investment in public infrastructure in Ontario’s history, creating a dynamic, innovative environment where business thrives, and building a secure retirement savings plan.

Source: Ministry of Economic Development (Canada)

Private Equity and Venture Capital Investing in the Islamic World

Article featured in the IFN 2015 Guide (pg.44) and feel free to download the complete guide from our web-site at


Islamic private equity (PE) remains a very small component of the global PE marketbut showed signs of strength last year with an increase of mergers and acquisitions(M&A) activity in the Middle East hitting a four-year high. Islamic venture capital(VC) continues to face an uphill battle in the region but demonstrated signs ofimproved market perception and attention. SUHAIL AHMAD writes.

Global alternative investment assets reached US$7 trillion in 2014 according to Preqin’s 2015 Global Alternatives Report. PE including VC was the largest component of alternative assets with US$3.8 trillion under management, an increase of 12% over the previous year.

Review of 2014

Aggregate capital raised by PE and VC firms worldwide in 2014 was a strong US$495 billion, with 85% of the activity in North America and Europe. PE returns as measured by public pension fund holdings reviewed by Preqin Performance Analyst remained strong at just under 20% for the year and clearly beating other alternative asset classes such as real estate and hedge funds with the latter closing out 2014 with a measly 2.9% average investment return as measured by the Barclay hedge fund index.

The Middle East witnessed some strong deal-making with publicly announced M&A across the Middle East increasing 23% to reach US$50.3 billion last year, the highest amount since 2010. Despite the strong M&A activity in the region, international private equity firms were not as aggressive as expected and inbound M&A activity declined 30% last year to US$4.2 billion, according to Thomson Reuter’s data.

One of the region’s largest PE firms, Dubai-based Abraaj Capital had an active year teaming up with the US-based TPG Capital to bid for Saudi fast-food chain Kudu, although it lost out to multinational cereal giant Kellogg in a bidding war for Egyptian biscuit maker BiscoMisr.

The sector in 2014 also saw the successful fundraising of the largest PE fund since 2011 with Gulf Capital of Abu Dhabi closing its largest and third private equity fund; GE Equity Partners Fund III with a US$750 million raise. Although Gulf Capital is not a dedicated Islamic PE firm, the closing is a positive development for the region and should spur more activity in PE in the coming years.

In the VC space we expect 2014 investment levels to improve over the US$29 million in funds raised in 2013 according to the MENA Private Equity Associations 4th Venture Capital in Middle East and North Africa Report. Similar to the regional PE data, it is unclear how much of the VC deal flow was Islamic but nevertheless the VC sector in the region continues to remain embarrassingly low compared to the rest of the world which had total VC investments of US$86 billion last year including the closing of 273 new VC funds!

Preview of 2015

PE firms will be increasingly interested in the Middle East region as investors look at diversifying geographically, better valuations than in the US, and capitalizing on the growth opportunities of the young demographics of the region.

Interestingly, a series of interviews of 75 corporate executives across the Gulf Cooperation Council (GCC) in the GCC Investment Outlook report late last year revealed only 45% of respondents think that the opening up of GCC stock markets to foreign direct investments will be one of the main drivers for investment in the region. However, 51% of respondents do believe PE transactions will increase significantly in 2015.

Small mid-sized enterprises (SMEs) and start-ups that do not have access to traditional Islamic banking credit options for a lack of collateral or operating history are desperate for an increase in venture capital options in the region. The 10th World Islamic Economic Forum (WIEF) held in Dubai last year had a lively panel discussion on the role and future of crowdfunding to fill the VC void in Islamic finance. The discussion and increased interest in crowdfunding is a positive step and will help increase awareness of VC as an important tool for positive socio-economic development in the region.


Islamic PE and VC have an opportunity to substantially contribute to the economic growth in the region by supporting businesses of all sizes reach the next level. However, it will continue to be a challenge for the industry to differentiate itself from conventional PE.

However, there are encouraging signs for VC with the growth of crowd equity funding which is inherently compatible and mutually reinforcing with Islamic values of building and supporting local communities, encouraging risk and wealth sharing, promoting real economic activity, and equity ownership over debt. These goals should be near and dear to all investors and participants in Islamic PE and VC.