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African private equity fund raising rises 12.5% to $2.7bn

By Peter Egwuatu

THE African Private Equity and Venture Capital Association, AVCA, has revealed that African Private Equity, PE, has remained robust with the total value of fund raising increasing by 12.5 percent to USD2.7 billion in 2018 from USD2.4 billion in 2017, indicating investors’ ongoing confidence in African PE.

ACVA, in its annual study presenting PE fundraising, deal and exit activities for 2018, stated   that the total value of African PE fundraising between 2013 and 2018 was USD17.8billion and the median size of final closed funds over the same period was USD123million.

Data from the report shows that 1022 reported deals worth a total of USD25.7billion took place from 2013 to 2018. While the value of PE deals dropped marginally in 2018 to USD3.5billion from USD3.9 billion in 2017, the number of PE deals encouragingly reached a six-year peak of 186 in 2018.

Africa

In terms of sectors, Information Technology, Consumer Discretionary and Consumer Staples accounted for almost half the total number of PE deals last year, reflecting the attractiveness of businesses that capitalise on Africa’s growing consumer market. Notably, Information Technology’s share of deal volume has significantly grown in recent years, nearly doubling to 19 percent in 2018 from only 10 percent two years prior.

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Tokunboh Ishmael, Chair of the AVCA Board and Co-Founder and Managing Director at Alitheia Capital, noted: “As the 2018 Annual African Private Equity Data Tracker shows, private equity activity on the continent has remained relatively stable in 2018. We have witnessed strong and sustained growth in the consumer-driven and technology-focused sectors and anticipate this trend to persist over the next few years.”  Enitan Obasanjo Adeleye, Director and Head of Research at AVCA, added: “African PE continues to present exciting developments and we are encouraged by the increase in fundraising in 2018 relative to the previous year. The data from the annual Data Tracker shows that investors remain bullish about Africa’s prospects and we are proud to continue educating and informing local and international investors about opportunities on the continent.”

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