Africa’s private equity funds have reported closing funds with $2bn in investments, according to the industry news source Private Equity Africa, citing data from Preqin data.
At the start of the year Ethos announced it had closed an $800m fund. The first fund by Vital Capital contributed $350m and Phatisa did not meet its original target on its first fund but announced a final close at $243m.
The total raised in full year 2012 was $1.8bn but the record, according to Preqin, was private equity’s boom year 2007 when $5bn was raised for Africa. The best year since the global financial crisis was 2011, with $2.9bn raised.
PEA reports that managers report that investors, or Limited Partners (LPs) are still slow to sign off on commitments. Actual investments are still lagging sentiment, earlier this year a survey of LPs by the Emerging Markets Private Equity Association (EMPEA) for the first time placed sub-Saharan Africa above the BRIC nations. The websites says that fund managers are starting to “feel the effect of change in strategy from the development finance community, which has traditionally been the industry’s fundraising saviour. Long-term industry anchors such as the CDC Group are now allocating more capital to direct investing and debt funds, meaning managers have to squabble for a shrinking private equity pool”.