Despite widespread decline felt by most economies across the globe, private equity fundraising in Africa has already managed to reach US$1.3bn for the first half of 2021, when including final and interim closes. Mirroring the gradual stabilisation of Africa’s macroeconomic environment is the African private equity (PE) industry, which continues to prove itself and is once again on a growth trajectory.
This is according to the 2021 H1 African Private Equity Data Tracker released by the African Private Equity and Venture Capital Association (AVCA). The report revealed that North Africa and West Africa jointly attracted the largest share of PE deals by volume, at 23% each. Multi-region deals attracted 50% of deal value for the first half of the year.
The data tracker provides a provisional look at half year PE activity in Africa, which AVCA CEO, Abi Mustapha-Maduakor, believes is particularly salient in these times of economic uncertainty and focused recovery. “Private capital remains fundamental towards sustained economic recovery in Africa. Although the first half results still show the lingering effects of the pandemic, we are pleased to see such levels of deal activity which is testament to investors’ resolve and commitment to supporting growth and scaling of businesses in Africa.”
Even though growth forecasts remained muted at the beginning of 2021, this was due to several African countries understandably grappling with persistent outbreaks of COVID-19, along with the cascading healthcare crisis and resulting socio-economic restrictions.
The first half of 2021 saw 120 reported deals to the value of US$2.1bn concluded on the continent. Financials, Consumer Discretionary, Industrials and Information Technology rose to the top, attracting the greatest investment and accounting for more than half (72%) of the total deal volume in the first half of 2021.
Financials demonstrated a marginal increase accounting for 24% of the total deal volume and value reported in 2021 H1, from 20% and 21% in 2020 H1 respectively. Within Industrials, the majority of deals in terms of volume and value were in Transportation with 37% and 77% respectively.