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 African Private Equity and Venture Capital Association (AVCA).
The report showed that 70 percent 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.
When annualized, fundraising into the continent could touch as high as $3.4 billion by year end, a possible increase of 37 percent from the $2.7 billion, raised in 2018.
In 2015, funds raised by African Private Equity firms, rose to $4.5 billion, from as low as $1.4 billion in 2014. After the surge in 2015, values of PE fundraising fell in 2016 and 2017 to 3.4 and 2.4 billion dollars respectively. Not until 2018, that the value of PE deals, buck the twoyear downward trend to record growth.
“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,” said Tokunboh Ishmael, Chair, AVCA and Co-founder and Managing Director, Alitheia Capital.
The report further showed that a total of 79 PE deals were recorded, with a total reported deal value of $700 million in the first half of 2019.
Moreover, 60 percent of the total deal value in 2019 H1 was from PE deals below $50million in size.
In terms of geographies, South Africa attracted the largest share of PE deals by volume (28 percent), followed by North Africa (19 percent), while Multi-region deals attracted the lion’s share of PE deal value (51 percent).
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As with previous years, Financials, Consumer Discretionary, Consumer Staples and Industrials were the highest performing sectors by volume in H1 2019, attracting 58 percent of the total deals volume.
Meanwhile, Industrials, Consumer Staples and Healthcare were the top three sectors by value, accounting for almost three quarters 73 percent 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 percent and 12 percent in 2019 H1 from 8 percent and 4 percent 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 percent of the total exit volume, followed by MBOS or private sales at 37 percent.
Michelle Kathryn Essomé, CEO, AVCA, said “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.”
