African Private Equity Deals Quadriples

African Private Equity Deals Quadriples

Recent trends in Private Equity (P.E) in Africa show that African P.E firms have taken the center stage in transactions in the sector. A survey by the African Venture Capital Association reveals that P.E transactions by African firms have quadrupled since 2012. According to the results of the Private Equity Data Tracker, year 2012 witnessed

Recent trends in Private Equity (P.E) in Africa show that African P.E firms have taken the center stage in transactions in the sector. A survey by the African Venture Capital Association reveals that P.E transactions by African firms have quadrupled since 2012. According to the results of the Private Equity Data Tracker, year 2012 witnessed just a US$2 billion transaction while 2014 had a whooping US$ 8.1 billion annual P.E transaction.

It was revealed that between 2007 and 2014, there were P.E 983 deals in Africa valued at US$34.5 billion with US$22 billion (64%) being raised by African Private Equity firms. This shows an active participation of African P.E firms in the sector and it gives African investees a reason to brighten up as this growth has been attributed to a relaxed regulation that allows Africa’s vibrant Pension Funds to invest a larger proportion of their money in Private Equity.

Regionally, Southern Africa has the highest trend of P.E deals with 31 %( 24% coming from South Africa of all deals from 2011 and 2014, followed by West Africa with 25% share and Central Africa at the lowest rung with 5%.Leading industries with records of this rise in P.E deals are Financial (17%), Consumer staple (14%), Industrials (14%), Consumer Discretionary (14%) and Telecomms with 25%.

AfricaPEvolume

With this trend, it is important that a less stringent investment pattern be designed to allow for more investment from pension funds. It was also discovered that close to 10 African countries have over US$379 billion in pension fund under management. Of these countries, South Africa alone has US$322 billion, Nigeria US$25 billion, Namibia US$10 billion and Kenya US$7.3 billion. A US$35 billion investment out of this money into P.E will see the value of Africa’s Private Equity, market doubled.

 

Oladipo Oladepo
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