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EMEA Private Equity Funds Turn To Africa For Returns

S&P Global's quarterly EMEA Private Equity snapshot was released today. Amongst the more interesting findings was deal activity in Africa. According to the report, there were 33 entry investments into the region, up 57% from the comparable period last year.

The increase in focus can further be explained by improving macroeconomic indicators such as GDP growth; expectations are in excess of 5% for seven Sub Saharan Africa (SSA) nations in 2018 following the strengthening of oil and commodity prices. Furthermore, Africa’s IT sector led all others with 16 new entry investments by EMEA GPs. These account for almost half of all inbound investments into the continent with the majority occurring in Egypt, Nigeria, and South Africa, while Kenya, Ghana, and Senegal.

Positive investor sentiment has also been observable through related fundraising activity. Carlyle, for example, closed two African-focused funds at $700m and $500m respectively. Allianz has established itself as the first large commercial lender to commit long­ term funding to an African infrastructure fund with a $120m twelve­ year loan to a vehicle underwritten by western development agencies.