Private equity funds are expected to play a bigger role in investments flowing into Africa over the next 12 months, says a Brian Marshall, a director with Standard Bank, one of South Africa’s big four banks.
An increasing number of private equity firms are raising capital to invest in sub-Saharan Africa investment strategies and scouting for deal opportunities. Marshall says Standard Bank has been receiving many inquiries from PE firms looking to partner with financial institutions in the region, according to an article in Independent Online, a South African news service.
This is in sharp contrast with Europe, where bankers have reported a slowdown in the flow of both private equity funds and deal-making as big investors wait to see how things will shake out with the Euro-zone debt crisis. Many private equity deals in Europe and the U.S. were highly leveraged, and current conditions are making it more difficult to raise this level of debt funding, reports Business Day.
Africa has huge potential. Estimates from both the World Bank and the International Monetary Fund hint that sub-Saharan Africa could achieve some of the highest growth rates in the world over the next 5 to 10 years.
According to EMPEA, an industry body, funds raised for sub-Saharan Private Equity strategies totaled US$1,499 million in 2010 up 55% from the US$964m raised in 2009.
The giant PE fund Carlyle, for example, launched its own sub Saharan Africa Fund earlier this year and has teams based in Johannesburg and Lagos to conduct buyout and growth capital investment exploration.
“Opportunities in emerging markets in general and sub-Saharan Africa in particular are expected to fuel a pipeline of deal activity in the next 12 months. We are already seeing through our presence in Africa a flurry of activity on the continent from private equity firms which are increasingly showing an interest to invest in sub-Saharan African assets. Africa has turned into the place to be for many investors seeking growth markets,” says Standard Bank’s Marshall.
Is your firm beefing up its presence in Africa? Are you exploring private equity job opportunities there? Add your comments below.
Comments on this entry are closed.