Great speakers and information at the Private Equity Africa 7th annual review and summit, with leaders of the African private equity world outlining key trends of 2017 and reviewing a tough 2016. There were excellent presentations by key speakers including David Cowan, Economist of Citi, Nigel Wellings of sponsor Clifford Chance and Leon Calvert Saunders of host Thomson Reuters.
The panel shared many key insights including the emerging trend to create credit funds. The panel was chaired by Spencer Baylin of Clifford Chance: Runa Alam (Development Partners International), Marlon Chigwende (Arkana Partners), David Damiba (Helios Investment Partners), Mark Jennings (Investec Asset Management), Suleiman Kiggundu (CDC) and Matteo Stefanel (Apis Partners).
Gail Mwamba: Private Equity Africa
Here are highlights from the presentation by Gail Mwamba, of Private Equity Africa, who organized and led the summit. They are the leading publication on private equity in Africa and have just published a very data driven 2016 annual report supported by global data from Thomson Reuters. For more information and the review (subscribers only) check the website.
Different international data sources have different ways of measuring fund-raising, but both show that 2016 was a hard year, particularly for smaller funds with little record. According to Preqin, $1.3bn was raised for Africa funds in 2016, down from $4.6bn the year before. EMPEA, which measures total fund-raising not just closes for sub-Saharan Africa, measured $1.9bn in 27 fund-raising transactions, down from $3.8bn in 31 transactions in 2015. Africa’s share of emerging markets fundraising was 4.5%, down from 8% in 2015. Globally fund-raising was up but emerging markets lost out. Looking at the charts however, 2015 was an exceptional year and the number is closer to the historical trend.
Credit fund-raising showed a similar pattern.
The number of deals picked up, according to Preqin, with about 100 deals valued at nearly $3bn although Mwamba said the real number of deals was much higher was many are not published. Business services continued the most popular transactions, followed by industrials and then consumer. South Africa continued to attract the most deals (31%) while Nigeria won 11% of deals.
The 2016 deals by value were influenced a giant deal by little-known Chinese private equity firm, which paid $1.14bn to acquire Lundin Mining Corporation’s 24% stake in Tenke Fungurume copper mine in the Democratic Republic of Congo. Other deals were Wendel Group buying Tsebo Solutions, a logistics and facilities services provider with 34,000 employees spread across 23 countries in Africa, for ZAR5.25bn from a consortium led by Rockwood PE. The third deal was Helios investing into Oando Gas and Power.
According to Preqin there were 31 exits at total value of $1.4bn, down from 31 exits valued at $2.1bn in 2015. Two sales by Rockwood (Tsebo and Safripol) influenced the figures. The record high was $20.4bn of exits in 2014.