Business
Africa continues to be most attractive for Private Equity investment
In the last decade, Africa has experienced an unprecedented influx of private equity investments. The Emerging Markets Private Equity Association (EMPEA) estimates that private equity investments in Africa rose from US$151 million in 2002 to US$3 billion in 2011.
Nearly two thirds of private equity firms are eyeing investments in emerging markets in order to tap into the growing demand for goods and services.
The third quarter survey by the EMPEA released last week indicates that about 76 percent of private equity firms surveyed showed interest in investing in emerging market funds, compared with 26 percent who were interested in developed economies-focused funds.
The survey further revealed equity managers expected Africa-focused funds to return an average of 16 percent per year, well ahead of other emerging markets like the Middle East and Central and Eastern Europe.
The new findings are expected to fuel optimism in Africa-focused funds, which have enjoyed unprecedented growth and interest from investors, on the back of strong economic growth.
Data compiled by Economist shows Africa is home to seven of the world’s fastest growing economies.
The EMPEA survey ranks sub-Sahara Africa as one of the most attractive markets for private equity in 2012 along with Latin America. The region climbed into the number five slot from seventh place in 2011 and eighth in 2010.
