Tag Archives: private equity
private equity: Latest News
Staff, 8:48 am
According to the African Private Equity and Venture Capital Association (AVCA), a total of US$6.5 billion has been raised for African PE from 2011 to 2016.
Kurt Davis Jr., 2:00 am AFKI Original
Short-term volatility and uncertainty in the African growth story create opportunities for hedge funds. Hedge funds generally operate more flexibly than private equity, and they have the creativity to generate bond-like returns that outpace inflation. Critics say hedge funds have limited liquidity in an opaque world. The riskiest play — but with big returns — is in agriculture and land. Where land is for sale in Africa, investors are making a play for a limited resource, especially when it’s arable, ripe for production or ideal for commercial and residential construction.
Staff, 12:01 am
The fall in African private equity investment in 2016 could be a short-term blip. Among the losers was US-based Carlyle, one of the world’s winningest investment firms. Carlyle invested $147m in Nigeria’s Diamond Bank in 2014. The bank’s market cap fell by 90% over the subsequent two years. Bob Geldof’s PE firm 8 Miles just invested in Blue Skies, a British fruit firm that operates in Africa. Utilities including telecoms were the most popular target for private equity investment in 2016. West Africa was the most active region.
Kurt Davis Jr., 9:54 am AFKI Original
As commodity prices have fallen, African manufacturing has increased leverage — and the attention of investors — to garner more foreign investment. Tanzania is probably one of the easier bets if you are following the crowd. Success stories include Kenya-based Catalyst Principal Partners, an East Africa-focused private equity firm which invested in Zenufa Laboratories, a leading Tanzanian pharmaceuticals manufacturer. Catalyst also invested in Chemi Cotex, which makes toothpaste, skin and hair products. Both involve non-food and beverage consumer goods that are manufactured locally. Both have taken market share due to quality products and competitive pricing.
Kurt Davis Jr., 9:32 am AFKI Original
Infrastructure in Africa is at the forefront of investors’ minds. Private equity investors see great opportunity, especially in power projects. The Ivorian president is a former IMF economist. The Ivorian budget minister is a former Goldman Sachs trader, and they’re on the same wavelength. The Côte d’Ivoire economy is expected to grow 8-9% in 2017 and 2018. Strengthening infrastructure will be key in the next phase of the Ivorian growth story. The government plans to spend $60 billion on infrastructure through 2020.
Dana Sanchez, 2:50 pm
About 90% of managed assets are concentrated in four countries including South Africa and Nigeria. SA leads, thanks to rules that allow them to invest 10% of assets through private equity. Nigeria is held back by trust issues. “The thought of using our pension fund for investment in public-sector infrastructure development is highly frightening given the well-known penchant for mismanagement inherent in public-sector institutions in Nigeria,” the Nigerian Labour Congress says. Pension funds are ideal for driving inclusive growth and social stability through long-term projects such as infrastructure, says consultancy firm RisCura.
Dana Sanchez, 12:01 am
Netherlands based off-grid solar provider Nova Lumos has raised $90 million in financing from private equity investment and development banks to roll out pay-as-you-go solar power systems in Nigeria. It’s the biggest fundraising round to date for the off-grid solar market, and hopes to provide cheaper and cleaner alternatives to kerosene for millions of people living in Africa. Nova Lumos was founded in Israel in 2012. Its “home power station in a box” includes a solar panel activated by text messaging that can supply enough electricity to charge a cell phone, operate a radio and illuminate a home.
Dana Sanchez, 3:36 pm
A hedge fund with Carlyle Group LP, the world’s second-largest private equity firm, has lost $400 million it invested in 2015 in a Moroccan oil refinery deal, according to a securities filing. Saudi billionaire Mohammed al-Amoudi owns 67.26% of Morocco’s Samir refinery. The deal highlights the risks U.S. investors face in emerging markets that have unfamiliar investor-protection laws. Still, despite the risks, investors continue to find the lure of higher growth in emerging markets attractive.
Kurt Davis Jr., 1:34 pm AFKI Original
African private equity deals fell to $2.5 billion in 2015, compared with $8.1 billion in 2014. Fundraising and transactions are expected to be down further in 2016. It is time to buy for 2017. Market expectations are low in some places, so asset prices are low. Logistics and financial services – going against the past market movement – are huge opportunities if you can buy in at low asset prices and ride the unavoidable African rebound in the next year and beyond.
Dana Sanchez, 5:28 pm
Bids from other consortiums including one led by South Africa’s Public Investment Corporation and Dubai-based Abraaj Group haven’t materialized. The Barclays Africa stake that is for sale is valued at about $4.3 billion. South Africa’s PIC manages pensions for government employees and is Africa’s largest money manager with about $13.5 billion in assets. In May it said it’s forming a group of black investors to ensure Barclays Africa remains in local hands.
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