Entrepreneurial investments and acquisitions in the Middle East by US firms is far behind other developed countries like UK and the gap needs to be filled, said DubaiBeat.com founder, speaking to an audience of MBA students from Georgia State University and SZABIST University in Dubai Knowledge Village.
The panel was part of the programs held for MBA students of Georgia State University while visiting SZABIST (Shaheed Zulfikar Ali Bhutto Institute of Science and Technology) campus in Dubai Knowledge Village.
“Although we have some US-headquartered private equity firms like The Carlyle Group active in the Middle East, UK firm were historically more active at entrepreneurial investments and acquisitions in the Middle East. A sample of such transactions was the acquisition of Middle East news portal AME Info by Emap, a UK Media group”, said Salman Jariri, founder of DubaiBeat.com in the Q&A section of the panel. YouGov, the UK-based market research firm was another company expanding in the Middle East by acquiring entrepreneurial research and consultancy firm Siraj. Acquisition of Dubai-based recruitment firm iQ Selection by UK-based Imprint Group was another sample of such UK edge over US firms.
Although hit by the recent credit crunch, players of entrepreneurial finance including investment banks and funds from developed countries are expanding in the Middle East and GCC. Firms like Goldman Sachs, Morgan Stanley and Lehman Brothers are already based in the Middle East and expanding. Ironically, this is happening at the same time that Middle East sovereign wealth funds are making high-profile investments in the US.
“Middle East sovereign wealth funds are now under pressure in the US and other developed countries, but the incident that really put Dubai and the Middle East money on the radar of Americans was the Dubai Ports World controversy when it entered the US after acquiring P&O”, Jariri said in the panel. Since then, US and Middle East officials have been trying to emphasize the benefits of sovereign wealth funds. For example US Treasury Secretary, Henry Paulson, recently visited the Middle East and assured investors in Abu Dhabi that the United States will remain open to sovereign wealth funds.
The panel and meetings between the students of the two universities were received favorably by the faculties. Jim Beach, faculty of the Georgia State University and leader of the group said: “DubaiBeat had many articles about events and the players in Dubai market, and the students found it a useful way to study the local market. One example of the site's usefulness was planning this meeting with SZABIST University. The meeting was one of the highlights of our trip.” The meeting was well received by SZABIST faculty as well: “It was a great opportunity and my students learnt a lot from this experience.” said Saher Gilani, SZABIST faculty member.
Middle East entrepreneurial finance is active in the Middle East, but has much more room for growth - both in small scale venture capital deals as well as larger deals typically favored by private equity firms. DubaiBeat.com provides related insight, analysis and research on entrepreneurial finance issues in the Middle East and is visited by players of different disciplines of entrepreneurial finance like venture capitalists, private equity partners and investment bankers.
More information about Georgia State University’s “Entrepreneurship Study Abroad in Egypt and Dubai”, including blogs of MBA students from this panel can be found at EgyptDubai2008.com.
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