Risk, reward and private equity’s billion-dollar play

Purpose This study examines Private equity (PE) investments in emerging markets, with a specific focus on the Middle East. It explores how market fundamentals, risk environment, cultural perceptions and governance transparency influence PE growth, applying a theory-driven approach. Design/methodology/approach A quantitative research design was employed, collecting survey data from 250 PE firms operating across 17 Middle Eastern countries. Structural equation modeling was used to analyze the impact of key economic and institutional factors on PE expansion. Findings The results indicate that strong market fundamentals and a stable risk environment positively influence PE growth. Conversely, cultural perceptions, lack of transparency and weak governance structures hinder investment expansion. The study also finds variations in PE growth drivers across different countries and sectors. Research limitations/implications Findings are limited to the Middle East, and further research is needed to test these relationships in other emerging markets. Practical implications Policymakers should enhance transparency and governance structures, while PE firms should adapt investment strategies based on cultural and economic differences. Social implications Encouraging regulatory reforms and governance improvements can foster inclusive economic growth through PE investments. Originality/value This research enhances the understanding of PE growth dynamics in emerging markets by integrating economic, cultural and governance factors into a unified analytical framework. It extends the Theory of Planned Behavior to investment decision-making in PE.