At the start of the year, the global private-equity business was looking forward to a change of fortune after the havoc wrought by the financial crisis.
The events of 2008 signalled a "dark period, marked by a dearth of deal activity, scores of distressed portfolio companies and widespread fund write-downs, which fuelled intense scrutiny as to whether the private-equity model still worked", in the words of the industry's leading research publication Private Equity International (PEI).
But last year, there was a feeling that the industry had turned the corner and recovery could be consolidated, even accelerated. Then came the Arab Spring.
The private-equity industry found itself especially vulnerable to the events in Tunisia, Cairo and elsewhere. Fund-raising fell dramatically and deals were suspended, with the hint that some of the big international companies were thinking of pulling out of the region altogether.
Abraaj Capital, the leading private-equity firm in the region and among the top 50 in the world, is in a unique position to judge the effects of the convulsions that occurred in North Africa in the spring, and which continue in some parts of the Middle East as the Arab world moves deeper into the long, hot summer.
But Mustafa Abdel Wadood, the chief executive of Abraaj, remains confident of the long-term prospects for the Middle East and North Africa (Mena) region. "With some minor though highly visible exceptions, Mena economies remain fundamentally strong and continue to grow," he says.
"The twin engines of high-absorption capacity for investment, in both hard and soft infrastructure, and the significant surpluses from hydro-carbons, against a backdrop of surging demographics and uninterrupted economic reform, give good reason to be optimistic."
Now uncertainty in the Middle East is being compounded by sovereign debt worries in Greece and other parts of the euro zone, a fiscal crisis in the US and economic worries in Asia. "This should be expected in an increasingly interconnected and interdependent global financial system," Mr Wadood says.
There might even be a unique opportunity in the region. Citadel Capital, an Egyptian private-equity firm with US$4 billion (Dh14.69bn) of assets under management, points out it was in talks with unnamed parties with a view to potentially selling a stake in the Cairo outfit.
Market speculation immediately put Abraaj in the frame as a possible buyer, but Mr Wadood declined to talk about Citadel. People close to Abraaj acknowledge, however, that such a deal might make sense.
Mr Wadood sees a silver lining in the West's economic and financial uncertainty and in the bigger Asian economies. He believes investors in developed markets will continue to shift towards faster-growing ones, and that includes the Mena region and South Asia, which is where Abraaj operates. "That's clearly positive for growth markets globally," Mr Wadood says.
As evidence, he cites a couple of recent developments involving Abraaj that suggest there is still life in the private-equity sector, even in trying times.
This year, at the height of the turmoil in the region, Abraaj acquired a 49 per cent stake in a subsidiary of Emirates NBD.
The deal for Network International, an electronic trading and payments provider, was clinched at $544 million, making it one of the biggest of recent years in the region. Mr Wadood calls it a "landmark transaction".
That announcement followed a deal earlier in the year with the Saudi Arabian General Investment Authority to set up a 2bn riyals (Dh1.95bn) platform dedicated to investment in the kingdom, regarded as the big financial market in the region.
Described by Abraaj as a "pioneering initiative", it will focus on making investments across such asset classes as general private equity, small-to-medium sized enterprises, property and public utilities.
"We are of the view that it is critical to create sustained economic opportunity in a region where 70 per cent of employment is generated through the small to medium sectors of the economy, yet these only contribute 30 per cent to GDP," Mr Wadood says.
Abraaj launched the Riyada Enterprise Development Fund to target this market.
Keeping the transaction wheel spinning, even when times are tough, is a hallmark of Abraaj. The firm emerged in 2002 out of a business founded and run by Arif Naqvi, the Pakistani entrepreneur, who had built up a regional investment operation despite the turmoil caused by the First Gulf War and the September attacks on the US.
Since 2002 Abraaj - it means "towers" in Arabic - has raised about $7bn and distributed about $3bn to investors. For five consecutive years it was named "Middle East private equity fund of the year" by PEI.
In PEI's most recent annual ranking, Abraaj came out as the leader in emerging market firms, outgunning rivals from much bigger financial markets such as Hong Kong, Beijing and Seoul.
"This validates our long-term focus on identifying companies that meet our strict investment criteria, unlocking their growth potential and, ultimately, delivering significant value for our shareholders," Mr Wadood says. The firm's top-slot ranking "proves that superior returns do exist in growth markets".
