Bahrain-based Shari’ah compliant alternative investment firm Arcapita sees Saudi Arabia as a “market with significant growth potential” for private equity, according to CEO Atif Ahmed Abdulmalik.
Abdulmalik said that Arcapita is particularly optimistic about the leisure, wellness and healthcare segments in the kingdom.
In October, Arcapita invested $67 million in NuYu, a chain of female-only gyms. The investment will allow NuYu to expand its network from seven gyms to over 30 spread across the country.
“The fiscal year 2018 marked our first private equity investment in the kingdom’s sports and wellness industries,” he said. “We believe these industries are poised to experience significant growth over the medium to long term, in large part due to the government’s commitment to help citizens to lead a more active and healthy lifestyle.”
Abdulmalik added that Arcapita has previously invested in multiple real estate projects in Saudi Arabia, which have “yielded strong returns, especially in the logistics sector.”
“We are currently focused on logistics and industrial-oriented projects that provide a recurring income in the range of 8 to 10 percent per annum,” he explained.
Across the wider GCC, Abdulmalik said that he believes the logistics and industrial sectors “will continue their robust growth over the medium to long term due to the sustained and continued growth of e-commerce.”
“While we are mainly focused on traditional sectors such as logistics and healthcare, we are seeing an uptick in investment activity across emerging sectors such as Fintech and e-commerce and are keeping an eye on both start-ups and established businesses in this space,” he said.
Additionally, Arcapita said it aims to create the MENA region’s first wellness-focused investment platform which is expected to include, among other sectors, fitness and wellbeing, pharmaceuticals and devices and non-clinical healthcare services.