CFA QATAR SOCIETY MEETING

Francesco CottiniQatar & Abu Dhabi Investment Company

October, 2016

”OVERVIEW OF PRIVATE EQUITY

IN THE MENA REGION”

~ $1.5bn invested in 2015 with a median deal size of c. $15mn (with 84% of all transactions in 2015 below $25mn)

FUNDS RAISED & COMPLETED INVESTMENTS(*)

2

Source: MENA PE Association, 2015

(*) It includes venture capital deals

Consumer goods, education and healthcare attracted almost 60% of investments by value due to MENA favorable demographic profile and government spending

INVESTMENT VALUE BY SECTOR IN 2015

3

Source: MENA PE Association, 2015

Investments by value are led by MENA largest markets with a growing middle class. Investments by volume are led by: UAE and KSA

INVESTMENTS BY COUNTRY IN 2015

4

Source: MENA PE Association, 2015

Investments by Value Investments by Volume

In MENA, the growth capital/minority stake model is the most common, due to the prevalence of family owned businesses, seeking to retain control

DIMENSIONS INFLUENCING INVESTMENT STRATEGY

5

Source: Bain&Co. 2016

KEY STRENGTHS / OPPORTUNITIES

6

Large, young population driving consumption demand

Currency Stability

Market Growth

Favorable Demographics

Government Spending

Geographical Location

Expected recovery in oil prices and need for governments to spend on infrastructure result in attractive, demand-driven economies

3rd in the world GDP growth as a regional block (4.5% CAGR ’15-’19) Most markets are highly fragmented, offering a range of opportunities

for consolidation or scaling

Various currencies are pegged with the dollar: critical advantage compared to other emerging markets

Gateway to Africa and Far-East

KEY CHALLENGES / RISKS

7

Dominated by family groups, reluctant to divest. ~ 90% of all commercial non-oil related activities is controlled by family firms

Asset Class Immaturity

Market Structure

Rapid Regulat. Changes

Geopolitical Instability

Exit Opportunities

i.e. increase of cost of fuel, introduction of VAT, etc.

Absence of a lengthy track record can lead to reluctance to acceptance private equity;

Governance Transparency

Arab spring, political turmoil

Highly interconnected business culture can lead to conflicts of interests

Illiquid public markets, strongly correlated to hydrocarbon prices and largely owned by local Governments

The prevalence of growth capital transactions in MENA means that building a good relationship with the selling party is fundamental to successful transacting

KEY COMPETITIVE DIFFERENTIATORS

8

Brand / ReputationAbility to Close Quickly

Sector Specialism / Market Knowledge

Networks / Contacts

Funds by geography focus, size and year of last fundraise

PRIVATE EQUITY MARKET MAPPING IN MENA

9

$+800m

Source: Credit Suisse: Private Equity Market Maps, Jan. 2015

$200m

(*) not exhaustive, it excludes real estate, infrastructure and sovereign funds

LIST OF PE AND VC FIRMS IN MENA (*)

10

Abu Dhabi Investment CompanyAbu Dhabi Investment HouseAccelerator Technology HoldingsAl Mal CapitalAl Mal Méditerranée InvestAlkhabeer CapitalAl Masah Capital LimitedAlternative Capital PartnersAmen InvestAmwal Al Khaleej CommercialInvestment CompanyAnfaal Capital CompanyArzan CapitalAscent GroupATLAMED Corporate InvestmentAttijari InvestAudacia CapitalAuvest Partners LimitedAzur PartnersBank AlkhairBECO CapitalBeltone Private EquityBerytechBrookstone Partners MoroccoCairo Financial HoldingCAPSA CAPITAL PARTNERSCDG CapitalCedar BridgeCI Capital Holding Company S.A.E.

Compass CapitalConcord International InvestmentsDaman InvestmentsDelta PartnersDubai Silicon Oasis CapitalDuet Group LimitedEastgate Capital GroupECP InvestmentsEFG-Hermes Private EquityEmerging Investment PartnersEuroMena FMC LimitedEvolvence CapitalFajr CapitalFenox Venture CapitalFidelium FinanceFINACorpFirogestFirst Equity PartnersFoursan GroupGenero CapitalGFH CapitalGlobal Capital Management LimitedGlobal MENA Financial AssetsGroFin AdvisoryGulf Capital Pvt. JSCHavenvest Private Equity Middle EastHBG HoldingsHummingbird VenturesICT Ventures Limited

IdeaVelopersIkdam GestionIMENAIntel CapitalInvestcorpIris CapitalIthmar CapitalItqan CapitalJadwa InvestmentKAMCO Investment CompanyKAUST Innovation fundKuwait Finance and Investment CoKuwait Financial CentreLeap VenturesLevant Capital LimitedMalaz CapitalMaxula GestionMBC VenturesMediterrania Capital PartnersMENA InfrastructureMena Venture InvestmentsMiddle East Venture PartnersMITC CapitalMobily VenturesMulverhill AssociatesNBK Capital Partners LimitedNile CapitalQalaa HoldingQatar First Bank

QInvestReAya HoldingRiyad CapitalSadara VenturesSAGES CapitalSamena CapitalSanabil InvestmentsSaned PartnersSaudi Technology Development and Investment CompanySawari VenturesSherpa Finance ClubSHUAA CapitalSiraj Fund Management CompanySphinx Private Equity ManagementStandard Chartered Private EquitySTC VenturesSwicorpThe Abraaj GroupThe National InvestorTIMAR VenturesTuninvest Finance GroupTunisie ValeursTVM Capital Healthcare Partners Ltd.United Gulf Financial Services N.A.Upline InvestmentsVenture Capital BankWAHA CapitalWamda Capital

Family-based (Amwal al Khaleej ), Government-sponsored (ADIC), Bank-based (EFG Hermes, TNI) and Independent firms (Delta Partners, Gulf Capital)

LARGEST SOVEREIGN WEALTH FUNDS IN REGION

11

Country Fund Assets (US$B)

UAE Abu Dhabi Investment Authority 773Saudi Arabia SAMA Foreign Holdings 757

Kuwait Kuwait Investment Authority 548Qatar Qatar Investment Authority 256UAE Abu Dhabi Investment Council 90

Algeria Revenue Regulation Fund 77UAE Investment Corporation of Dubai 70

UAE International Petroleum Investment Company 68Libya Libyan Investment Authority 66

Iran National Development Fund of Iran 62UAE Mubadala Development Company 61

Iraq Development Fund for Iraq 18UAE Emirates Investment Authority 15Oman State General Reserve Fund 13Bahrain Mumtalakat Holding Company 11Oman Oman Investment Fund 6

Saudi Arabia Public Investment Fund 5UAE RAK Investment Authority 1

Source: Sovereign Wealth Fund Institute (SWFI), Accessed February 2015

12

APPENDIX

MENA Index Consumer Goods Materials Industrials Financial Services Telecom Energy

In the past 8 years the MENA index generated a negative performance, due to the financial and energy crises. The Consumer Goods sector registered +3%

MENA SECTORS PERFORMANCE

13

Stan

dar

diz

ed s

cale

(%

)

-6%

Source: Bloomberg HERMMENA Index - Total returns

-2% -2% -8%-5%+3%-3%CAGR Returns to date

07

/04

11

/04

03

/05

07

/05

11

/05

03

/06

07

/06

11

/06

03

/07

07

/07

11

/07

03

/08

07

/08

11

/08

03

/09

07

/09

11

/09

03

/10

07

/10

11

/10

03

/11

07

/11

11

/11

03

/12

07

/12

11

/12

03

/13

07

/13

11

/13

03

/14

07

/14

11

/14

03

/15

07

/15

11

/15

03

/16

Qatar Bahrain Saudi Arabia Kuwait Adu Dhabi Dubai Oman

Ind

ices

to

tal r

etu

rns

–st

and

ard

ized

sca

le

Stock Exchange # of companies representing 25% of total market cap

5-yrs moving average of total returns for the period 2009-2015

Saudi 3 -1.9%

UAE (Dubai) 2 -4.3%

UAE (Abu Dhabi) 2 0.1%

Qatar 2 3.7%

Kuwait 2 -5.7%

Oman 2 -4.2%

Bahrain 1 -7.6%

The public equity market that has historically generated the highest average returns for the 5-year private equity cycle within the period 2004-2015 is Qatar

GCC INDICES TOTAL RETURN COMPARISON

14

Source: Bloomberg - Total returns

GDP growth, constant prices (%)

MENA IS FORECAST TO BE 3RD-FASTEST GROWING REGION IN THE WORLD

15

Source: Bloomberg - Total returns

Source: IMF, October 2014 World Economic Outlook