Africa is set to see up to US$50 billion in private equity over the next decade, according to research by McKinsey&Co.
In a recent publication on the investment opportunities in Africa, McKinsey said private equity in Africa is to experience rapid growth over the coming years to 2018, spurred by continent-wide demand for capital.
Across Africa, demand for capital is to grow by 8 per cent a year to 2018; while in 10 individual African countries demand may expand by up to 20 per annually, the research analysts said.
As a result, McKinsey predicts Africa will see up to US$50 billion in private equity flow in over the coming ten years.
However the analysts caution that distribution of private equity will not be equal across the continent, with variations to occur by country and by industry – with supply of funds not necessarily matching demand.
McKinsey said currently major international private investors entering Africa prefer established investment managers and large investments, meaning that smaller countries and sectors may be overlooked, regardless of growing opportunities and demand.