Private equity investors are now bullish about Africa, after thumbs down, which lasted over three years. The first half of 2019 was a game-changer. During this period, the Africa-focused private equity firms raised US$1.7 billion, according to a report from African Private Equity and Venture Capital Association (AVCA). This figure gives hope to PE investors that the year may reach the levels of funds raised during 2016 –US$ 3.4 billion- or even surpass that. The top fund raiser during the period was Climate Fund Managers, who closed at US$850 million for its Climate Investor One fund. The PE firm will focus on renewable energy projects across Africa, Asia and Latin America. Amethis, another investment fund manager betting on African businesses, closed at US$400 million for its Amethis Fund Two.
Private equity exits are also slowing down this year. Only 19 recorded exits in the first half of 2019. If this pace of growth continues in the second half, the year will result in the fewest private equity exits on the continent since 2012. It is a good augury for the continent, notwithstanding political uncertainty and the downturn in growth in some African economies, the PEs are bullish about the content for fund raising. South Africa’s economy pulled the largest share of private equity deals by volume in the first half of the year. Significantly, there is increased private equity interest in healthcare with the sector surpassing its total deals and volume, compared to the first half of 2018.
