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African PE ecosystem continues to grow

Anna Lyudvig
Oct. 1, 2019, 1:53 p.m.
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African fundraising for the first half of 2019 reached $1.7bn in final closes and $0.9bn in interim closes, according to the African Private Equity Data Tracker, released by the the African Private Equity and Venture Capital Association (AVCA).

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African fundraising for the first half of 2019 reached $1.7bn in final closes and $0.9bn in interim closes, according to the African Private Equity Data Tracker, released by the the African Private Equity and Venture Capital Association (AVCA).

Tokunboh Ishmael, Chair, AVCA and Co-Founder and Managing Director, Alitheia Capital, said: “We continue to see robust and sustained growth in the African PE ecosystem, as highlighted by the latest fundraising, deals and exit figures. In particular, Africa’s rising middle-class continues to be a key driver of growth for African PE.”

According to the report, 70% of the total amount raised from final closes was from sector-specific funds. This indicates a growing trend for specialization among fund managers, preferring to focus on identifying and valuing opportunities in their areas of expertise.

 The report also reveals that 79 deals were recorded, with a total reported deal value of $0.7bn in the first half of 2019.

Moreover, 60% of the total deal value in 2019 H1 was from PE deals below $50m in size.

In terms of geographies, South Africa attracted the largest share of PE deals by volume (28%), followed by North Africa (19%), while Multi-region deals attracted the lion’s share of PE deal value (51%).

As with previous years, Financials, Consumer Discretionary, Consumer Staples and Industrials were the highest performing sectors by volume in H1 2019, attracting 58% of the total deal volume.

Meanwhile, Industrials, Consumer Staples and Healthcare were the top three sectors by value, accounting for almost three quarters (73%) of the total reported deal value in the first half of 2019.

Notably, the Health Care sector showed an important increase in terms of volume and value, rising to 11% and 12% in 2019 H1 from 8% and 4% in 2018 H1, respectively.

The report shows the total number of reported African PE exits in the first half of 2019 stood at 19, with Trade Buyers being the most common exit route, representing over half (58%) of the total exit volume, followed by MBOs or private sales at 37%.

Michelle Kathryn Essomé, CEO, AVCA, added: “As shown by the 2019 H1 African Private Equity Data Tracker, the African PE ecosystem continues to grow at an exciting pace. We continue to be encouraged by investors’ interest in and commitment to Africa’s growth. The final close in 2019 H1 of major funds such as Amethis’ €375m fund – as well as the ongoing fundraising efforts by other funds – is testament to the attractive opportunities that exist on the African continent.”

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