More than 45 Africa-focused private equity funds are looking to raise US$12 billion funds to invest in the continent, according to a report by the African Venture Capital Association and Ernst & Young, reports zawya.com.
Africa-focused PE funds have raised US$4.7 billion since 2007 as the investing world woke up to the opportunities in Africa. Fund-raising picked up especially in 2010 and 2011 when PE managers raised US$2.4 billion and US$3.3 billion, respectively.
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"Despite a difficult 2012, the long-term outlook for fund-raising for the region remains strong," the report noted. "Although funds are taking longer to raise across the globe, there are a significant number of funds currently on the road that are likely to close in 2013."
According to financial services research company Prequin, many new players entered the market in the last four to seven years.
Carlyle Group is the most well-known global private equity firm to set up shop in Africa, with offices in South Africa and Nigeria, and raising around US$500 million.
Meanwhile, other PE players are circling around the region with Brazil-based BTG Pactual looking to invest US$1 billion in Africa.
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By GlobalData"As a percentage of GDP, PE now represents 0.12% in South Africa compared with 0.10% in Brazil, 0.14% in China, 0.33% in India, 0.75% in UK and 0.98% in the US," according to EMPEA and E&Y research.
PE investors have been entering the region in droves, exits have been flat over the past two years. There were 15 exits per year between 2010 and 2012, usually to strategic local or regional buyers.
