Gulf Secondaries Market Emerges as Liquidity Channel Amid M&A and IPO Slowdown

The Gulf’s private capital ecosystem is rapidly embracing secondary markets as sluggish initial public offerings and tighter fundraising cycles restrict traditional exit routes. Once considered a niche financial segment, secondaries—which involve trading pre-existing ownership stakes and commitments in venture capital and private equity funds—are expanding to provide crucial liquidity to regional founders, employees, and early-stage backers looking to monetize holdings without waiting for full acquisitions.

According to data from Bloomberg’s electronic platforms, Gulf secondary-market turnover nearly doubled from $22 billion in 2022 to $40 billion in 2025, alongside a surge in issuance from $246 billion to $452 billion. "Secondary transactions have been happening in the region for several years, but many of them have not been publicly captured," noted Kholoud Alharbi, partnership lead at Endeavor Saudi Arabia. Magnitt reported that regional startups secured $3.8 billion across 688 deals in 2025, marking a 74% year-on-year increase despite persistent liquidity bottlenecks.

Traditional pathways remain constrained; the Middle East and North Africa saw only two technology-related IPOs and 46 M&A transactions in 2025, yielding an average active exit horizon of six years. Consequently, specialized managers are stepping in to bridge the gap. Abu Dhabi-based Key Capital, partnered with SHUAA Capital, is raising its $50 million Key Fund I to acquire stakes in growth-stage companies across the UAE and Saudi Arabia. Basil Moftah, co-founder of Key Capital, estimated the regional secondaries market at approximately $1 billion, paralleling dynamics seen in the United States following the 2008 financial crisis.

Looking ahead, regional secondary buyers are securing asset purchases at significant discounts to net asset value, averaging between 35% and 45%, compared to 5% to 15% seen in mature Western markets. With Gulf sovereign wealth funds, family offices like Saudi Arabia's Al Muhaidib Group, and institutional investors increasingly allocating capital toward secondary vehicles, the asset class is positioned to provide diversified exposure, faster distributions, and sustained support for late-stage technology leaders across the Middle East.