New data published by the African Private Equity and Venture Capital Association Africa (AVCA) demonstrated that the total value of private equity deals in Africa rose by 40% between 2015 and 2016. According to the AVCA, $3.8bn worth of private equity deals were concluded in Africa during 2016, an increase of $800m to the $2.5bn seen during 2015.
In contrast, total value of Africa private equity fundraising* fell by 47% to $2.3bn in 2016; down from $4.3bn in the preceding year. This was most likely a result of the African region seeming less attractive due to the negative effect lower commodity prices had on multiple economies on the continent as well as the strong asset performance and slowly rising rates in developed markets such as the US.
Over the 2011 – 2016 period, the Consumer Staples, Consumer Discretionary and Financials sectors accounted for the largest number of deals at 17%, 15% and 14% respectively. While the Telecommunication Services, Utilities and Energy sectors accounted for the largest share of deals by value at 25%, 21% and 16% respectively.
Over the same period, real estate accounted for 8% in terms of number of deals and 3% in terms of deal value.
In its outlook, the AVCA notes that the sub-Saharan Africa region is expected to attract the greatest part of investors’ interest but the North African region is poised to increase its share in both deal number and values as the political environment becomes more stable in the region.
*by year of final close