Major sovereign governments and sovereign wealth funds (SWFs) in the Middle East are increasingly considering new private equity models for investment, according to the fourth annual Invesco Middle East Asset Management Study.
Allocation to PE has increased by 8% on average over the past three years, according to the 2013 study. Nearly all SWFs started out investing into funds but many have moved (or are considering a move) to co-investment or direct models.
The report also says Co-investment is the logical next step for an SWF of material size looking to increase its exposure or reduce costs or liquidity risk. Meanwhile, direct operations are attractive to those who feel they can compete with private equity firms or want to access particular strategies not aligned to the large private equity houses. (Image Source: Invesco Middle East Asset Management Study)