Fundraising in the Middle East: What are the keys to success?

It is no secret to anyone in private markets, that 2023 has been a tough year for fundraising. But how are GPs and LPs viewing their opportunities, what does the rest of the year hold and where does the Middle East sit within all this? We spoke to Bassirou Niang ahead of his panel at SuperReturn Middle East, about his observations working in this regions and his prediction for 2024.

It’s been a tough year for fundraising, as inflation is rising and the cost-of-living crisis is growing. How has the fundraising environment changed over the last year, and what are the biggest challenges for GPs?

Globally, fundraising has been slower compared to previous years and even the best fund managers have taken more time to raise money. Nonetheless, those who deliver a consistent level of returns to their investors will continue to be rewarded – regardless of any slowdown.For emerging markets, fundraising has historically been more challenging due to several factors including the macro-economic environment. This means that those fundraising in these markets are well equipped to raise capital in the context of the headwinds that are currently affecting the global economy.

As a result, at DPI for example, we have been able to raise capital in up and down cycles as witnessed by some of our recent successes – notably in co-investments. This comes down to several fundamentals including a strong partnership with our investors, a consistent investment strategy, and a focus on delivering returns while driving positive, long-lasting social, environmental, and economic impact.

This approach has enabled us to successfully raise funds and partner with exceptional companies to build a diversified portfolio of scalable high-growth businesses providing goods and services to Africa’s middle class and mass market.

How can you approach these challenges and navigate the current fundraising landscape?

There are three key ingredients for approaching these challenges and navigating the current fundraising environment. The first is about sustaining strong and successful relationships with existing LPs and co-investors. This requires regular communication, shared values and a commitment to long-term partnerships which add meaningful value to companies and communities.

The second is about exploring different or new opportunities and being creative. Managers must be bold and communicate clearly if they want to cut through the noise of a competitive market and differentiate their offering.

The third ingredient for successful fundraising is about ensuring that you play to your strengths. Managers can’t be all things to all LPs; it is important to articulate your specialism in a way that differentiates your offering.

At DPI, our investment strategy is to build a diversified portfolio of scalable high-growth businesses which serve Africa’s growing middle class and mass market. At the same time, we integrate practices which drive the sustainable development of the businesses that we invest in. We achieve this through deep-rooted partnerships with our portfolio companies and a focus on impact and ESG that becomes embedded into their culture and day to day operations.

What are your observations about the fundraising and deal making environment in the Middle East?

In the Middle East, there is an even greater emphasis on relationships as a building block that drives business forward. We know that investors in the Middle East often prefer to invest in ventures that they have personal connections with, so we spend time making sure that investors are able to get to know us better.

When it comes to sources of funding in the region, sovereign wealth funds, family offices, and high-net worth individuals are constantly seeking new ways to put their capital to work and diversify their portfolios. There is a real sense of appetite for innovation that drives creative ways of deploying capital.

Overall, how do you think 2023 has fared for fundraising and what does 2024 have in store?

It is no secret that 2023 has, so far, been a tough year for investors. Fundraising and deployment timelines have lengthened. Investors have prioritised quality over quantity and have doubled down on existing relationships. GPs that have prioritised long-term partnerships with their investors and have delivered consistently have been rewarded.

At DPI, we have seen successes across our portfolio with one of our portfolio companies reaching unicorn status. This is a testament to the simple fact that innovation gets rewarded and that companies that find new ways to solve old problems will triumph. We are optimistic that 2024 will bring more success.

Want to learn more? Join Bassirou Niang at SuperReturn Middle East 2023 in Dubai >> https://informaconnect.com/superreturn-me/