Private equity roundup — Africa

With a third of African countries growing at more than 6% annually, Africa has certainly arrived on the global economic landscape. The continent has demonstrated economic stamina over the last few years, emerging relatively unscathed from the financial crisis in comparison with most other regions and continuing to grow rapidly despite concerns about slowing growth in other emerging markets, such as China and India. Today, the continent accounts for many of the world’s fastest-growing economies, driven by an expanding middle class, improved business environments and increasingly stable political democracies.

Growing interest from LPs resulted in a significant increase in fundraising numbers for 2013. The US$3.3b raised in 2013 is the highest annual amount raised since US$4.7b was raised in 2007. Moreover, the medium-term outlook for fundraising in Africa remains strong. According to the 2013 Global Limited Partners Survey undertaken by the Emerging Markets Private Equity Association (EMPEA), Sub-Saharan Africa was ranked in first place as the most attractive emerging market for general partner (GP) investment, for the first time in the survey’s nine-year history.

According to data from the African Private Equity and Venture Capital Association (AVCA), which includes follow-on investments, the aggregate deal value of African deals done in 2013 was US$3.2b, a significant increase from the US$1.6b recorded in 2012.

The PE community in Africa has been growing steadily in recent years and is now entering a new level of maturity. Our analysis in this year’s Africa PE roundup reflects that the African PE industry is gradually coming out of its infancy, with a variety of both global and local players exploring opportunities beyond the already established market of South Africa.