After a strong 2014, with $8.1 billion (€7.2 billion) worth of deals completed, Africa’s private equity market looks set to grow this year.
A report by the African Private Equity and Venture Capital Association (AVCA) says that in spite of challenges such as subdued growth in Europe and China and short-term uncertainties in Africa itself, there is increased investor confidence in African private equity over the next few years.
The report revealed a shift in investment activity, with West Africa now receiving the most private equity investments by number, suggesting a move away from the once dominant South Africa. West Africa’s share of private equity transactions grew from 22% between 2007- 2010 to 25% between 2011-2014 whilst South Africa’s share dropped from 28% to 24% in the same period.
Fundraising in Africa also shows no signs of slowing down, with over $4.1 billion raised in 2014 and a total of $22 billion raised since 2007 illustrating an increased global investor appetite for private equity funds on the continent.
With a growing middle class, the main sectors attracting African private equity investments are fast moving consumer goods, financial institutions and industrial companies, which have accounted for around 60% of private equity transactions by volume from 2007-2014.
Michelle Kathryn Essomé, chief executive of the AVCA, says: “This research shows that even with global systemic challenges affecting the investment environment, investors are still keen to explore opportunities in Africa. “
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