Checking In From Dubai

Wow… what a difference two years makes.

I arrived in Dubai last night to find that the dust and cranes I saw in 2006 have now tranformed into a city. And not just a city — but a confident and large one. So confident, in fact, that construction on tallest building in the world is soon due for completion, as pointed out by my taxi driver on the way from the airport.

I spent today at the PEI private equity conference and have met with many of the region’s household names, including Abraaj Capital and DIC. Arif Naqvi, Group Chief Investment Officer of Abraaj Capital is positive on the state of the market in the Middle East, and Aameer Al Ansari, CEO of DIC agrees.

This optimism is a marked difference to the doom and gloom story of last week at SuperReturn in Munich. Much of this cheerfulness is because the region escaped most of the credit crunch affecting the US and Europe. The difference here in the Middle East is that many deals are in the mid-market space rather than the large mega buyouts, so the leveraging hasn’t been as extreme as it has in America or Europe.

Also many buyouts are financed by regional banks rather than multinational and they haven’t been affected by exposure to sub-prime mortgages in the US. So for many firms it is business as usual. And business is good.