The trouble is, a lot of funds may still be standing on a weak footing in terms of shareholding, debt, understanding of businesses and their managers’ ability to execute these deals. This isn’t necessarily bad news. “It will help in a way because it might remove the weaker elements [players] and reinforce the stronger ones,” says one insider. “However, if the market conditions worsen, the weak ones might not survive but the next phase will probably be better for the industry.”

The global financial crisis has indeed educated investors. Now they’re bound to do more due diligence before committing money. Easy money can no longer be made quickly, as it could in the past. Yet for those still left with stacks of cash, Stewart Hamilton of IMD University isn’t necessarily a scarecrow. He sees the bigger picture. “Private equity thrives when the economies are thriving - when people are looking to expand, invest more and when they can see opportunity,” he says. “As long as opportunities exist in the Middle East, there will be people who want to be part of it.”            

 

 

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