Private Equity in Africa 2010

Interesting article in The Africa Report on investment in Africa called A rebound for African private equity.

The whole article is worth reading, but here are a few high-level points that caught my attention:

• Fundraising targeting sub-Saharan Africa totaled $1bn in the first half of 2010, already more than the $964m raised during the whole of 2009
• There will soon be more data for analysts to examine how investments have fared, as some of the older Africa-focused funds approach the end of their five-year investment and ‘get-out’ phases.
• Initial public offerings (IPOs) on African stock markets remain the exception rather than the norm for private-equity managers that are looking to exit their investments. Far more likely are trade sales to regional players or multinationals trying to expand their footprints.
• PE company Aureos’ only exit last year was a trade sale of West African bottled water company Voltic. In 2010, its only exit was a trade sale in August of Invescom, the mobile operator otherwise known as Orange Madagascar.
• The African Development Bank invested $30m in a Helios fund in May and in March the European Investment Bank put $6m into the Fundo de Investimento Privado Angola.
• In Brazil, 20% of the money that goes into private equity comes from Brazilian institutions. Even the smallest pension funds in Africa have plenty of cash in them – Tanzania’s state fund is setting on around $1bn. Unlocking this capital could help ease up the reliance on DFIs and turn private equity into an African-led asset class.

If you’re interested in the investment climate in Africa, check out the African Venture Capital Association