Saudi Arabia’s private equity investments reached $4bn in 2023

The 2019-2023 Saudi Arabia Private Equity Report revealed that the kingdom had witnessed a remarkable surge in private equity (PE) activity, reaching a pinnacle of approximately $4bn in 2023, reported the Saudi Press Agency (SPA).

According to the report published by the venture data platform, MAGNITT, and sponsored by SVC, the private equity landscape has displayed consistent growth since 2020, experiencing a substantial 3.7x rise in 2021 and further catapulting to 5.9x its 2021 level in 2022.

Notably, the composition of PE transactions has undergone significant shifts, particularly with a pronounced emphasis on Buyout transactions.

Between 2020 and 2023, Buyout transactions witnessed a notable 20-percentage point increase in their share of the total, while concurrently, Growth transactions saw a growth of 2 percentage points over the same period.

Across the last five years, Buyout transactions have dominated the PE investment landscape, capturing an average of 80% of the total capital deployed in these transactions. This trajectory underscores the evolving dynamics and the increasing prominence of private equity within the kingdom's financial ecosystem, reflecting a strategic shift in investment preferences.

The report also revealed that the PE activity in the kingdom has been characterised by significant transactional diversity and concentration in specific industries over the past five years. Notably, food & beverages emerged as the most transacted industries within the PE landscape between 2019 and 2023.

Manufacturing claimed the top spot in terms of total investment, commanding 46% of the capital deployed during this period.