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Private equity exits in Africa
have hit a nine-year high, according to a survey by the African Private Equity
Association and EY.
Their study also found holding periods have topped six years amid macroeconomic uncertainty.
PEI’s Research & Analytics
team have delved into the fundraising figures to discover whether this has
meant that firms are spending longer at the capital raising stage.
In 2016 to date, the average
time spent on the road by vehicles targeting Africa is 21 months, six months
longer than in 2010.
Although rapid urbanisation
and the rise of the middle class mean the region remains attractive to
investors, many still approach the market with caution. The lack of large
pan-African companies and a commodity-induced slowdown throughout the continent
have left some wondering whether the opportunities available are big enough to
generate meaningful returns.
Despite these reservations,
which may explain the lengthening fundraising period, $3.8 billion was gathered
for closed-ended private equity vehicles focused on Africa in 2015, the largest
amount raised since 2010. So far this year, $1.25 billion has been collected
from the close of six vehicles.
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