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  • MENA Private Equity and Venture Capital Report

    2014

  • 2 MENA Private Equity and Venture Capital Report 3 MENA Private Equity and Venture Capital Report

    Dear friends and colleagues,

    I am honoured to introduce the 9th edition of the “Private Equity & Venture Capital in the Middle East Report”, a publication that has become a leading barometer of our industry and, indeed, of the region’s economic development.

    In the decade since the report began, private equity has established a strong foothold, weathered a global economic crisis, and emerged stronger. It is clear that although global perceptions may be clouded by news coverage of geopolitical instability, investors with deep knowledge of the region are as positive as ever about the tremendous opportunity on offer in countries that have developed rapidly in so many aspects.

    This report shows that in 2014, investment levels are at the highest level since the global financial crisis. The average deal size is also on the rise, driven in part by a number of large consortium transactions in the six countries of the Gulf Cooperation Council. And we are seeing more international private equity participation.

    General partners will be encouraged by fundraising increasing to the highest level since 2008, with the amount in 2014 double that of the previous year. This has been aided by an increased volume of successful exits.

    With the consumer story only just getting underway – driven by youthful demographics, rising incomes, and relative under-penetration of many goods and services -- the MENA private equity industry is offering investors exposure and growth that is often purer than that found in public equity markets.

    The industry is well served by a roster of fund managers with strong regional expertise

    and networks, and who benefit from the experience of investing through economic cycles and periods of political volatility.

    Bringing such seasoned professionals together; the MENA Private Equity Association gives the industry a strong and clear collective voice, and acts as a link to similar associations around the world.

    Compiling this report is an important part of the association’s work, serving to promote greater transparency in the industry and to enhance knowledge of the impact of private investment on the economy. In this way, the association complements the work carried out every day by fund managers across the region as they gain the interest and confidence of international investors.

    I would like to express great appreciation to Lina El Zein, Director of the MENA Private Equity Association, and her support team and advisers, who support our cause with such enthusiasm and dedication. Last but not least, we would very much like to thank the sponsors of the association and of this report.

    Sincerely Yours,

    Dr. Helmut M. Schuehsler

    Chairman & CEO, TVM Capital Healthcare Partners

    Foreword

    The MENA Private Equity Association

    Extends its sincere appreciation to Zawya for sharing primary data and industry and to our knowledge partners Deloitte for developing the report analysis.

    Deloitte Declan Hayes, Managing Director, Deloitte Corporate Finance Limited

    Sam Surrey, Director, Deloitte Corporate Finance Limited

    Zawya Ali Arab, Product Manager, Zawya Financial Solutions, Thomson Reuters

    Josiane Assaad, Content Manager, Zawya Investment Monitors, Thomson Reuters

    Youmna Akiki, Research Associate, Zawya Investment Monitors, Thomson Reuters

    Steering Committee We also thank the association’s steering committee members for their contributions towards the development of this report.

    Dr. Helmut Schuehsler, Chairman & CEO TVM Capital Healthcare Partners

    Haythem Macki – Founder & Managing Partner, Growthgate Capital

    Huda Al-Lawati, Managing Director, The Abraaj Group

    Imad Ghandour, Managing Director, CedarBridge Partners

    Samer Sarraf, UAE Country Head, Amwal AlKhaleej

    Media Task Force We are grateful for the public relations and media campaign support from the following:

    Nahed Ashour, Senior Manager Arabic Content and Media, Capital MSL

    Sponsors Without the support of the following generous sponsors, this report would not have been possible.

    With Gratitude

    HealtHcare Partners

  • 4 MENA Private Equity and Venture Capital Report 5 MENA Private Equity and Venture Capital Report

    Sponsor Profile

    TVM Capital Healthcare Partners TVM Capital Healthcare Partners was established in 2009 as part of TVM Capital Group, an affiliation of globally acting venture capital and private equity firms with an operating track record of 30 years, and has since then been led by Chairman & CEO, Dr. Helmut M. Schuehsler. TVM Capital Group has financed more than 130 healthcare and life science companies and has documented its success as a growth capital investor through 45 initial public offerings from its portfolio. The firm is focusing on making highly specialized growth capital and small buyout investments in healthcare companies in the Middle East and North Africa (MENA) region and India that are or target to become leaders in their regional markets. The firm has assembled a strong team of investment professionals who are supported by a group of healthcare operators as executives-in- residence in its accelerator company, TVM Operations Group, and TVM Healthcare Advisors, which provides healthcare focused research and advisory services. Collectively, this team has developed an ability to conceptualize and develop business opportunities that provide investors with completely proprietary deal flow and investment opportunities. TVM Capital Healthcare Partners has broken new ground with four portfolio investments to date in specialized services that were either non-existent or drastically undersupplied, e.g., long-term care, rehabilitation, home care and world-class fertility treatment. A fifth investment focuses on the area of medical device development and manufacturing. The firm operates out of the Dubai International Financial Center (DIFC) and is licensed and regulated by the Dubai Financial Services Authority (DFSA).

    As of 31.12.2014 TVM Capital Healthcare Partners and its five portfolio companies, ProVita Internatioanl Medical Center, Cambridge Medical &Rehabilitation Center, Manzil Health Care Services, Bourn Hall International and Ameco Medical Industries employed 1.200 employees, 40 % of which are females; and had a total invested capital of US$110 million. TVM Capital Healthcare Partners upholds the highest levels of fairness, integrity and transparency in its organisation, as well as portfolio companies endorsed by its compliance with the International Finance Corporation’s performance standards on social and

    environmental sustainability. TVM Capital Healthcare advocates ethical behaviour in all of its activities as well as a transparent and open consultation processes with stakeholders. The close engagement with TVM Capital Healthcare’s portfolio companies on social, environmental and governance (ESG) aspects, fosters a deep awareness and understanding of ESG issues that protects and enhances the value of investments, ensures responsibility towards environment and society, and attracts and retains a motivated and loyal workforce which shares the firm’s pursuit of excellence.

    Contact Information TVM Capital Healthcare Partners Ltd.

    DIFC Gate Village, Building 4

    PO Box 113355, Dubai, UAE

    T +971 (4) 401 9568

    www.tvm-capital.ae or www.tvm-capital.com

    HealtHcare Partners

    BECO Capital

    BECO Capital is a Venture Capital firm that provides early stage growth capital and hands-on operational support for technology companies in the MENA region with a focus on the GCC. Founded in 2012, BECO Capital is led by a team that enjoys a solid and diverse track record across the venture capital, technology, entrepreneurial and financial sectors. The Firm is a hands-on partner that assists its portfolio companies to grow organically and expand to new markets across the GCC, acquire key talent, implement operational improvements, adopt corporate governance practices and raise growth funds. BECO Capital also offers follow-on funding to its portfolio companies and helps line-up large regional investors and global Venture Capital firms for larger follow-on fundraising rounds.

    BECO Capital invests in companies that ride the technology revolution in our region; solving local problems for businesses and consumers, building marketplaces that bring consumers and businesses together and creating efficiencies that never existed before. We strive to identify and support the leading entrepreneurs that will build the break-out companies in the MENA digital space. To this end, we have screened over 700 opportunities in the MENA region and invested in 8 portfolio companies, such as Propertyfinder, that allows consumers to find the right property for rent and/or sale in an efficient and transparent manner; Careem, that allows corporate users and consumers alike to book cars with drivers either on demand or on a pre-scheduled basis throughout 16 cities in the MENA region; and Bayzat, that helps corporates choose the most efficient medical insurance for their staff.

    BECO Capital is led by three partners: Dany Farha, Amir Farha and Alvaro Abella.

    Dany co-founded Bayt.com, one of the most successful e-commerce companies in the MENA region, as COO leading and staffing offic