Africa private equity deals grow to $1bn

Feb 06 2013 08:09

Johannesburg - Private equity funds completed $1.16bn worth of deals in sub-Saharan Africa in 2012, a near 10% increase from the previous year, a survey showed on Tuesday.

Funds raised for the region also grew to $1.4bn last year, from $1.3bn the previous year, but still far below a 2008 peak, according to data from the Emerging Markets Private Equity Association.

Private equity investors are increasingly targeting sub-Saharan Africa, drawn by some of the fastest economic growth rates in the world and an expanding middle class.

The region is projected to grow around 5% in 2013, according to the IMF.

US private equity firm Carlyle Group completed its first African deal in November, paying $210m for a stake in Tanzania-based agribusiness Export Trading Group along with two other investors.   

Last month, South Africa's Ethos Private Equity said it had raised $800m for a new fund, one of the largest amounts secured by an Africa-focused fund.

This was rivalled only by Helios Investment Partners which raised a $900m fund in 2011 after attracting more than $1bn in orders.

Private equity funds completed 61 deals in sub-Saharan Africa in 2012, EMPEA said, the highest since 2008 when there were 50 deals.

Although the total capital invested in the region increased last year, it was less than half that of 2007, when private equity funds completed $3.4bn of deals.

Fundraising in 2012 was also far short of the record $2.2bn raised in 2008.

The amount of private equity capital invested in sub-Saharan Africa was comparable to Russia's share ($1.24bn) but less than a quarter of the $5bn invested in Latin America.

EMPEA said emerging market private equity funds received 20% of global private equity commitments last year, the largest share to date.

Some 161 emerging market funds raised a total of $40.3bn in 2012, up from 148 funds that raised $38.5bn in 2011.

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