Real estate and private equity are the two most popular alternative asset classes with investors in the Mena region, according to research firm Preqin.
Financial data provider Preqin, which has just been acquired by private equity giant Blackstone, has published a summary of its last three Middle East investor surveys carried out between 2022 and 2024.
The surveys highlight the popularity of alternatives within the region, which is above the average in other regions.
GCC investors focus on Egyptian real estate
Among family offices, almost a third (31%) had alternatives within their portfolios, equivalent to between 40 and 60% of their assets under management (AuM).
While this statistic has remained consistent in the last three years, the composition of these portfolios has changed significantly, according to Preqin.
Private equity and real estate have become the dominant asset classes, at the expense of hedge funds and venture capital.
Saudi Arabia sees surge in private equity
The proportion of investors allocating 20% or more of their AuM to real estate has doubled between 2022 and 2024, accounting for more than half of the survey group.
Private equity allocation has fallen slightly, from 47.8% to 36.7% but remains a significant proportion of AuM.
In contrast, none of the survey groups held more than 20% of their AuM in either hedge funds or VC funds in 2024.
According to Preqin, this is partly due to declining performance relative to client expectations.
This metric declined for both hedge funds and VC funds while rising for real estate and private equity.
However, the biggest improvement in investor expectation was seen in private debt – in 2024, performance exceeded expectations among 85.7% of investors.