African Fundraising Outweighed by Deals


February 14, 2014

Although Africa is still an emerging force in the private equity (PE) marketplace, the largely ignored successes of African based PE funds are now starting to come to the fore. The Sub-Saharan region of Africa is a particularly lucrative proposition right now, which is seeing more investors and international firms look at the area than ever before.

However, a recent Reuters report indicates that those looking to invest now might have already missed some of the biggest opportunities. Despite fundraising figures dropping 46% in the region against the figure raised in 2012, the deployment of $1.6billion, largely accrued over the past five years, made 2013 a bumper year for PE deals in the region.

These figures, which Reuters sourced from the Emerging Markets Private Equity Association (EMPEA) will give hope to those who are looking at emerging markets to continue providing lucrative opportunities throughout the rest of the decade against a current backdrop of uncertainty.

Robert van Zweiten, the Chief Executive of the EMPEA, told Reuters, “In Sub-Saharan Africa, 2013 was the beginning of a big deployment phase for private equity capital, resulting in a drop in fundraising for the region but a five-year high for investment. “A large amount of capital was raised for the region in previous years, and now that capital is being put to work.” The big difference in Sub-Saharan Africa against many of the other emerging markets that have started to struggle around the world is that consumer spending in the region is on the increase.

This, combined with the recent discoveries of natural resources in many central and East African nations, is enabling this area to begin to thrive.
Levels of investment in Sub-Saharan Africa increased 43% year on year in 2013, against a 7% decline in global emerging markets, proving that opportunities are still out there for investors and PE firms that are willing to go and find them.

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