PE Key Trends Blog

Technology is the Key to Unlocking Asian-Style Returns in Africa

Mar 26, 2013 1:12:57 PM / by Robert Ientile posted in africa, palico member, private equity, Private Equity Market, V2

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By Palico member Andrea Bohmert, partner at Knife Capital in Cape Town

Africa is still a neglected continent relative to its potential private equity opportunities. While those with an investment connection to Africa tend to have an overwhelmingly positive attitude regarding the opportunity the continent represents, those with no connection, on average, still have a starkly negative view. This is a point underlined by Building Bridges, Ernst & Young’s 2012 Africa attractiveness survey.

The positive perception amongst those investors with a business presence on the continent is so strong that on average they rated only Asia (and only slightly so) as a relatively more attractive investment destination than Africa in the Ernst & Young survey. However, participants with no connection to Africa viewed it “as the least attractive investment destination in the world.” That perception is wholly unjustified. But it does mean that Africa, relative to other emerging markets, remains an uncrowded land of opportunity, particularly Sub-Saharan Africa, with its strong demographics and largely untapped consumer potential.

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Private Equity KeyTrends #1 - January 29, 2013

Jan 30, 2013 5:27:44 PM / by Robert Ientile posted in blackstone, africa, china, newsletter, Palico, palico keytrends, PE KeyTrends, V2, yale

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A concise fortnightly distillation of key private equity news, with links to noteworthy PE articles and studies, edited by Palico SAS – The Online Marketplace for Private Equity LPs, GPs and Adviser

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African Fundraising Looks Set for a Record Year

Jan 15, 2013 2:30:39 PM / by Robert Ientile posted in africa, african, private equity, Private Equity Strategies, V2

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It is hard to generalize about a continent that has 54 countries, 1 billion people, a plethora of languages, and many cultures. Still, a few salient African facts stand out.

With average annual growth of 5 percent over the past decade, Africa has been relatively untouched by the global financial crisis, plus its prospects look bright. Its population is set to double by 2025, while the economic infrastructure needed to serve its rapidly growing middle class is embryonic. It is the fastest growing region in world, with the International Monetary Fund estimating that 7 of the 10 fastest developing economies between 2011 and 2015 will be in Africa.

All of this means that there is unprecedented interest in investing in African private equity – particularly in the sub-Saharan region, which arguably holds a relatively greater share of the region’s unexploited potential. Public and private pension funds, endowments, foundations, insurance companies, family offices and sovereign wealth funds are eagerly reviewing investment opportunities in the region.

Given the review processes Palico has seen, and the number of fundraising campaigns targeting Sub-Saharan Africa, we think new private equity commitments for the region could hit $4 billion in 2013. That’s more than three-fold the $1.2 billion raised in 2012 and easily surpasses the 2008 bubble-year record of $2.5 billion.

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