Private equity and financial contracting in the MENA region.

Abstract

The scope of the present study is to define the legal and cultural obstacles private equity firms encounter throughout the different stages of their investments in the MENA region: prior to the acquisition, during the partnership with local majority shareholders and upon exit. The present study seeks to find solutions for such obstacles through financial contracting that may be inspired from western private equity practices while taking into account the region’s particularities. The solutions proposed tend to secure the investments and enhance value creation. The aim of the present study is to build a systemic approach for PE funds investing in the MENA region that tend to increase returns while protecting their interests. Such systemic contractual approach could cover the lack of structural reforms in relation to foreign direct investments in the region and the lack of sophistication in business financing.