Research

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Through the first three quarters of 2018, only one Middle East-focused fund completed a close, with Foursan Group reach-ing a first close of US$82 million for its second fund in June. Notably, the fund will focus on Jordan and Iraq rather than the countries of the Gulf Cooperation Council (GCC), where much of the private capital activity in the Middle East has histori-cally been concentrated. Indeed, managers have already completed four deals in Jordan this year, while investments in the U.A.E. are on track for their slowest year since 2015. The myriad conflicts and scandals in the GCC may be dampening the world’s enthusiasm for its private capital industry and especially its burgeoning technology sector. Despite flagship exits in 2017 of companies such as Souq and Careem, in addition to well-publicized efforts by the region’s leaders to modern-ize their economies, venture capital deals in the Middle East have declined from 28 in 2015 and 2016 to just 13 so far in 2018. However, Gulf Capital’s US$267 million investment in Geidea—the largest investment in Saudi Arabia recorded by EMPEA—suggests veteran managers can still navigate the Middle East’s complex investment landscape.