Africa’s Private Equity Outlook Remains Positive For 2015

Written by Staff

Mar 04, 2015

The outlook for private equity in Africa remains positive for 2015, a new report by the African Private Equity and Venture Capital Association (AVCA) reveals.

This is in spite of ongoing challenges concerning subdued growth prospects in Europe and China and any short-term uncertainties on the continent itself. The report shows growing support for, and increased investor confidence in, African private equity over the next few years.

The African Private Equity Data Tracker shows deal activity on the continent remains strong with US$8.1bn worth of deals completed in 2014 – the second highest on record. This was due, in part, to a number of significant deals announced in 2014 including the $3.1bn worth of funding secured by IHS Towers, the mobile infrastructure provider, from existing and new investors in 2014. Since 2007, 983 transactions have been completed with a total value of $34.5bn reflecting the improving environment for private equity in Africa.

Fundraising in Africa also shows no signs of slowing down, with over $4.1bn raised in 2014 and a total of $22bn raised since 2007 demonstrating increasing global investor appetite for private equity funds on the continent.

The tracker reveals a shift in investment activity, with West Africa now receiving the highest share of private equity investments by number, providing evidence of a gradual widening of investment activity outside South Africa. West Africa’s share of private equity transactions on the continent grew from 22% between 2007 and 2010 to 25% between 201 and 2014 whilst South Africa’s share dropped from 28% to 24% in the same period.

The main sectors attracting African private equity investments continue to be fast-moving consumer goods, financials and industrials, which have accounted for around 60% of private equity transactions by volume from 2007-2014.