East Africa Private Equity Deal Dashboard 2016 (Report): RisCura & East Africa Venture Capital Association (EAVCA)

Table of Contents

  • Forward
  • Market commentary
  • Private equity in East Africa
  • Survey sample
  • Headline statistics
  • Deal type
  • Geographic focus
  • Deals by sector
  • Control status
  • Definitions

Read the full report below.

Introduction

The first ever dashboard on East African private equity deals has been released, another step forward in the quest for solid investment data on the African continent.

Put together by global professional investment services firm RisCura on behalf of the East Africa Venture Capital Association (EAVCA), the dashboard shows that Kenya is dominating the region as a hub of private equity activity.

Formed in 2013, EAVCA aims to foster private equity and measure its impact on economic growth in East Africa. “We specifically want to bridge the knowledge gap between the public and private sectors on the impact of private equity on growing enterprises,” says Nonnie Wanjihia, EAVCA’s Executive Director.

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“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,” she says.

The RisCura-EAVCA East Africa Private Equity Deal Dashboard surveyed 16 funds, of which 13 are EAVCA members, and 63 transactions, which Rory Ord, Executive at RisCura says provides a fair sample. Of those, the value of deals in 2015 was $152 million, up substantially from the 2014 value of $52 million.

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Growth continues to be a theme, with just over two thirds of the 2015 deal value classified as growth capital. “This shows that the activity is not just about financial engineering,” says Ord.

Most of the funds that contributed to the sample invest more broadly on the continent than East Africa, and most of the capital comes from pan-African funds.

Sector Concentration

The dashboard shows that deal activity in Africa is highly concentrated in a few key sectors. 35% of the deals by value are in the financial sector, including banks, insurance and asset management companies. A further third are in consumer-related companies, including both staples and discretionary consumer spending. This is followed by energy investments at 15%.

“These three sectors make up 81% of investment capital,” he says.

From a deal count perspective, the story is slightly different. Consumer businesses still dominate the deal numbers with 40% of deal count. Financials is the second biggest category by number of deals, making up 14% of deal count, compared to 35% of deal value. No other sector makes up more than 10% of deal count.

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East Africa continues to attract interest from private equity firms and investors. However, due to the early stage of the industry there is a need to continually track deals to establish individual firm track records.

“The private equity industry will continue to grow if performance is monitored and communicated to potential investors. The fund raising done to date by the region’s private equity pioneers is commendable and should encourage new GPs,” Ord concludes.

East Africa Private Equity Deal Dashboard 2016: RisCura and East Africa Venture Capital Association (EAVCA)

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