Private equity funds are targeting a combined $15.86 billion to invest across Africa, according to data from Private Equity International’s Research & Analytics Division.
There are currently 67 funds in market targeting the region, focusing on a range of different sectors, including renewable energy, agribusiness, healthcare, TMT, financial services, natural resources, consumer goods and retail. Strategies include buyout, growth equity, debt and funds of funds.
Africa has already proved popular with investors this year, with $2.88 billion raised in H1 alone, more than the $2.7 billion raised in the whole of 2014.
In January Helios closed its third fund on $1.1 billion – reportedly the largest fund yet dedicated to African private equity – and in March, Development Partners International closed its second fund on $725 million.
Following the close of its North Africa Fund on $375 million this year, The Abraaj Group has raised $1.37 billion this year to invest in Africa, as reported by PEI.
The robust fundraising figures have prompted fears among some that there may be too much dry powder in funds targeting larger assets, pushing up prices. However, others argue that the funding gap across Africa is so large the capital can be easily absorbed.
“If you put the amount of capital raised in relation to the funding gap across the continent, an incremental $1 billion or $5 billion is still small,” Souleymane Ba, a principal on the investment team at Helios, told PEI. “The reality is the funding gap is so massive that even all these numbers put together are still like a drop in the bucket.”
Look out for PEI’s Africa Special 2015, published alongside the September issue.