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KKR Seeks Investments in Saudi Arabia
DUBAI - KKR & Co., the leveraged buyout firm run by Henry Kravis and George Roberts, is studying possible investments in Saudi Arabia as it prepares to expand in the Middle East.
- PUBLISHED: Thu 14 May 2009, 12:07 AM UPDATED: Thu 22 Aug 2024, 10:38 AM
“Any way you look at it, it's the biggest market,” said Makram Azar, who joined KKR in September as head of the firm's Middle Eastern operations. “It has scale, it has 28 million people, it has lots of corporates and industries and family businesses that we could support and give growth capital to.” KKR's Middle East unit said yesterday it received a license to operate in Dubai's International Financial Centre and will use the office as its regional hub.
The planned expansion follows a slowdown in Gulf economies as a result of a decline in oil prices, credit shortage and increased government spending to boost growth and employment. Egypt, Saudi Arabia and the United Arab Emirates were the largest recipients of private equity investment for the past four years, according a report by the Gulf Venture Capital Association in March.
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“It's definitely a good time to be looking at investment opportunities,” said Azar, former head of sovereign wealth funds at Lehman Brothers Holdings Inc. “KKR is looking at a variety of businesses and isn't restricted to any sector,” he said in a telephone interview late yesterday.
Private equity firms are struggling to finance acquisitions in Europe and the U.S. after the credit crisis shut off the debt financing for acquisitions. The firms are turning to Asia and the Middle East to find investments. Carlyle Group, the world's second-biggest private equity firm, set up a base in Dubai in 2006, and has started a dedicated $1 billion fund for Middle Eastern investments. KKR doesn't have any plan to set up a local fund, he added.
“We already have funds and capital that we could put to work in this region, we don't need to limit ourselves to a local fund for this region,” Azar said.
The buyout firm plans to partner with big families and companies and offer them growth capital or invest with them in acquisitions, Azar said. KKR will invest alongside Gulf Sovereign Wealth Funds that have invested with KKR previously.
“With the sovereign wealth funds, they've co-invested with us for a long time and we'll be co-investing with them for the right opportunities as well,” Azar said.