Private Equity in Africa: Planting Seeds

Scant listings and light trading volumes rank among the biggest challenges for public investors in Africa. As investors on the continent’s local stock exchanges, we believe the growing interest in private equity opportunities on the continent will lead to more IPOs and more liquid markets.

Private equity firms typically seek to exit an investment after (hopefully) growing and improving the business so it can be sold at a hefty profit. There are several ways to exit. They can sell to another local company (public or private), sell to a foreign company, sell to another private equity firm, or list on the local exchange or a foreign exchange (Numerous African companies seeking international investors have listed on the London Stock Exchange, for example.) Thus, as the number of private equity investments in Africa grows, so too will the impetus for private equity firms to find smooth and suitable exit strategies for these investments.

Read more: Private Equity in Africa: Planting Seeds – Africa Capital Group.