Sixteen private equity funds in East Africa transacted deals to the total value of US$152 million in 2015, according to new data released by investment services firm RisCura and the East African Venture Capital Association (EAVCA).
The RisCura-EAVCA East Africa Private Equity Deal Dashboard surveyed 16 funds – 13 of which are EAVCA members. The 16 funds said they performed a total of 63 transactions over 2015, to the value of US$152 million – substantially higher than the 2014 value of US$52 million.
“Although the numbers are still small, the dashboard shows that private equity is growing, particularly as some local and regional pension funds continue to take an interest in the asset class,” said Nonnie Wanjihia, EAVCA’s executive director.
Within East Africa, Kenya dominates the region, with the researchers calling it a “hub of private equity activity”; however, the data also finds that most of the funds invest more broadly on the African continent than just East Africa, and most of the capital comes from pan-African funds.
Looking to the sectors favoured by investors, 35 per cent of funding value went to the financial sector, including banks, insurance and asset management companies.
A further third of the total value of funds went to consumer-related companies, including both staples and discretionary consumer spending.
The energy space came in third place with 15 per cent of funds.
These three sectors accounted for 81 per cent of investment capital, the report says.
The number of deals per sector did not entirely echo the value of funds each received. 40 per cent of deals went to consumer businesses; while the financial sector accounted for 14 per cent of deals – as compared to receiving 35 per cent of the total value transacted