Its report predicted that 2022 is likely to be a record year for cross-border mergers and acquisitions (M&A).
Lumina said that since 2018, the Middle East’s contribution to overall revenue for UK companies has increased by 1 percent year-on-year.
It added that in 2020, the MENA region generated 14 percent of revenue for FTSE listed companies, compared to 13 percent in 2019 and 12 percent in 2018.
Lumina Capital Advisors said it anticipates that this growth will continue in 2022, with the percentage of MENA revenues generated by FTSE listed companies exceeding 15 percent by year-end.
Andrew Nichol, partner, Lumina Capital Advisers said: “There is a significant push in a number of key sectors as the GCC looks to diversify away from oil and establish itself as a key player in the aerospace, healthcare, and infrastructure markets.
“Moreover, GCC countries are committed to being important players in the energy sector and are making significant ESG investments in other geographies with the objective of bringing these innovations to the region.”
He added: “Additionally, we are seeing strong growth in the technology sector, where the GCC has a young, tech-savvy population to tap into as the world continues to innovate through technology. Several GCC countries have taken notable steps to advance this agenda, including the establishment of a number of Fintech regulatory sandboxes and a number of technology-specific government investment funds.”
While UK companies already established in the region are growing their operations, Lumina said it also sees new companies eyeing up the MENA opportunity and expanding to the region for the first time.
The number of FTSE listed companies with operations in the MENA increased from 22 to 25 between 2018 and 2020.
Lumina noted that while there are multiple examples of capital flowing from the UK into the GCC, capital is also moving back the other way, with a number of high-profile investments being announced in recent months.
Abu Dhabi-based Mubadala’s £10bn commitment into UK clean energy and tech sectors and SABIC’s Teeside investment provide recent examples of the GCC’s push into ESG. Saudi-based PIF’s investment in Newcastle Football Club is also seen as an opportunity to both raise the profile of the region and bring ties closer with the UK.
George Traub, managing partner, Lumina Capital Advisers, said: “The recent free trade agreement negotiations between the GCC and the UK will have a significant impact on future M&A activity. The reduction in trade barriers and establishment of a more secure regulatory environment will encourage UK firms to the region as the GCC looks to imports skills not currently available to them.
“This is also on the back of Brexit where this is a key move for the UK as they seek to highlight and maintain their position as a world player while taking advantage of their ability to form their own trade agreements.”
Lumina focuses on matching capital and transactions between the Middle East and the UK, with offices in London, Dubai and Riyadh.
