Africa private equity

South Africa, the African continent’s largest economy, had better take note. West Africa, an area that includes Nigeria, has for the third time in three years notched up more private equity (PE) deals than Southern Africa.

West Africa had the highest reported value of deals ($545m) during 2013, surpassing Southern Africa ($491m) and Eastern Africa ($163m), according to the 2014 Deloitte’s East Africa Private Equity Confidence Survey, published this month. Continue reading »

Africa’s private equity industry, with the exception of South Africa, is at a phase of relative infancy and has its share of shortcomings. But factors like political stability, infrastructure growth and rising consumerism have helped spike activity in the continent’s PE hotspots across west, east and southern parts of the continent, fuelling optimism for 2014. Continue reading »

Actis, a British private equity investor, wants to provide Cameroonians with power. On Thursday it agreed to pay $220mn to acquire 56 per cent of Cameroon’s national grid, Société Nationale d’Electricité (Sonel), and two power plants in the country, Kribi and Dibambe.

The grid’s current majority owner, US energy titan AES, is credited for giving Cameroon greater access to more reliable supply of power. Cameroon is now level with Spain in terms of ease of getting electricity according to World Bank data. Can Actis continue AES’s legacy? Continue reading »

Addis Ababa: hello PE

When I heard about the US investor, Gabriel Schulze, who’d gone out on a limb and started up Ethiopia’s first private equity fund, I couldn’t wait to meet him.

The feeling wasn’t mutual. Famously reticent, it took me more than a year to convince him to meet me. But when we did, we ending up busting our two-hour time slot over tea and coffee at a private members’ club in London and speaking for six hours. You can now read the interview from that meeting, Portrait of a frontier investor, on FT.com. Continue reading »

By Andrew Brown of Emerging Capital Partners

Last week the International Monetary Fund (IMF) predicted a further drop in China’s growth to 7.3 per cent in 2014, the lowest figure that the country has experienced in the last 23 years.

China’s continued economic slowdown as it shifts from export-led to consumer-driven growth has prompted speculation as to the knock-on effect on economies that have benefited from China’s rise. Debate has centred on whether many frontier economies, including those of sub-Saharan Africa, are reliant on continued rapid growth in China’s demand for commodities to drive their own economic development. Continue reading »

Despite South Africa having the most active financial markets in Africa, as well as an established track record in private equity, black empowerment companies have struggled to attract PE deals over the last few years.

In 2012 however, things were a bit different. The number of investments has picked up. But the average size of invesments has shrunk. What’s going on? Continue reading »

South African private equity funds rarely took an interest in neighbouring countries, preferring to invest at home. All that is now changing as Africa rises, and South Africa faces stagnation.

In May, Johannesburg-based Vantage Risk Capital made its first investment in West Africa, and only its second transaction outside of South Africa, with a $30m mezzanine capital investment in Genser Energy’s Ghana operations. Metier says it is expanding its southern Africa portfolio. South African banks Investec and Standard Chartered are investing in private equity off their own balance sheets.

 Continue reading »

A lot has been written about the potential of the African consumer but there’s not been exactly a flood of deals to demonstrate investor interest.

Well, here’s one: the Abraaj group, one of Africa’s larger private equity groups, has snapped up Fan Milk International of Ghana. It’s a vote of confidence for the west African country, which has seen consistently high growth over the last few years, and for the region in general. Continue reading »

Private equity in Africa is on the up – so it was only a matter of time before investors started looking at the more extreme end of the market: distressed assets. Funds in South Africa are showing a keen interest in what is a new area, buoyed by a new law that helps to rescue ailing companies from the brink of collapse.

But are South African dealmakers fully equipped to handle what is considered to be a highly risky asset class? Continue reading »

East Africa’s largest private equity fund Catalyst Principal Partners reached its final close last week, at $125m, writes Katrina Manson. It marks a growing pot of money chasing deals in the region whose nascent private equity industry has little record but is keen to make the most of a dearth of capital for a growth market of 200m people. Continue reading »

With Africa playing catch-up on developed countries and other emerging markets, it’s easy to focus on the infrastructure projects or the big consumer market plays. And at the other end of the spectrum, for (really) small investments, there’s microfinance.

That leaves something of a “forgotten middle”: African SMEs with the potential for high growth but are not big enough to get on the radar of most western investors, and have trouble getting lending from local banks.  Continue reading »