Avanz Capital Partners, in association with the African Venture Capital Association, recently published a report titled,’The Private Equity Climate in Africa Embracing the Lion.’ Here is a summary of some of the findings with a link to the full document.
Africa is one of the fastest growing investment regions in the world today. As the continent’s markets mature and investment grade opportunities arise, the benefits of investing in Africa-‐focused funds are a growing consideration even for established investors. In several countries, traditional barriers to entry, such as poorly developed financial markets, political instability and the fragmentation of the economy are gradually being broken down by political reform and economic growth. South Africa in particular has led the rise of the rest of Africa by developing its national financial markets to near global standards. It is expected that North Africa will soon follow suit as it seeks to reestablish strong commercial credentials and geographic advantages in the wake of the dual shocks of regional uprising and European financial crisis.
Perhaps not all investors are ready for Africa, but Africa is ready for investors. Contrary to popular belief, the political and economic environment continues to improve dramatically, which has created a significant opportunity to cultivate a myriad of industries. The proof is becoming more evident as African private equity managers expand their track records of success and continue to post impressive returns on capital. The report argues, ‘Indeed, we believe that African managers are now sufficiently established and have the potential to offer compelling returns.’
Private equity offers a unique and stable investment opportunity in Africa. As mentioned earlier, the South African private equity pooled market performance IRR at 23.1% for the ten-‐year period ending December 2011 compares favorably to most global markets. Carefully selected fund management teams with the appropriate strategy for the markets they target, demonstrable past performance, and solid experience would provide the opportunity to take advantage of the growth and diversity found in Africa. A well-‐constructed Africa private equity funds portfolio is expected to provide financial investors with strong returns, balanced risks through diversification and appropriate exposure to the most promising industries and companies across the region. See the full report.
Avanz Capital Partners Ltd. is an independent investment firm that specializes in private equity across the emerging and frontier markets. It has been established to invest in private equity funds in emerging and frontier markets, with complementary direct and secondary activities.