There is growing potential for private equity deals in the Middle East, says Shirish Saraf, vice-chairman of Samena Capital, an investment fund focused on the Middle East, North Africa and Asian markets.

“There is significant opportunity here and will remain so. You have today a lot of fragmented industries that require consolidation,” he says, adding that growing consumption in the region is also creating attractive markets for private equity investors.

Saraf says that the investment firm is looking to close two “fairly sizeable” private equity deals in the Middle East in the next three months.

His comments come after Samena Capital, in a consortium with two sovereign wealth funds, acquired a 30.6 per cent stake in the UAE’s RAK Ceramics in mid-June.

Under the terms of the RAK acquisition, the Samena-led consortium acquired 250 million shares via its subsidiary Samena Limestone Holdings.

RAK is one of the largest producers of ceramic products such as floor tiles and Saraf says the company has strong growth potential due to the boom in the regional infrastructure sector and rising demand in Africa and Asia.

“It is a truly global brand in the Arab World,” he says.

The investment firm is looking to maintain its stake in the company for the next three to five years. Saraf says there is the potential to sell off non-core assets of RAK Ceramics in the future.

“Samena can also possibly look towards unlocking value in the non-core businesses, whether through disposals, strategic buy-ins, other initiatives, there are multiple options being considered,” he says.

Samena is aiming for a 25 per cent internal rate of return (IRR) for this investment, the company’s typical target set for its funds.

The investment firm acquired the stake from the ruling family of Ras Al-Khairmah, who will continue to maintain a significant stake in the company which is listed on the Abu Dhabi Securities Exchange.