Private equity in Africa

Market conditions

In this section the market conditions that influence private equity pricing in African markets are discussed. First, we cover the theoretical cost of equity, which reflects the risk and reward profile of the markets. Secondly the supply and demand of capital in the private market is reviewed by examining fundraising for private equity funds. Lastly, we discuss the pricing of the listed market. Improved market conditions are evident in Africa’s reduced cost of equity, which bodes well for investors into Africa.

Private equity fundraising over time

Total fundraising in 2017 reached USD 2.3bn, compared to USD 2.6bn in 2016. A total of 11 funds raised capital during 2017, the largest being Actis Energy IV, Vantage Mezzanine III and Adenia Capital IV.


Actis Energy IV closed at USD 2.75bn and will cover Africa, Latin America and Asia, with USD 920m expected to be invested in Africa.


Vantage Mezzanine Fund III closed at USD 280m and will have a Pan-Africa focus.


Adenia Capital IV will cover sub-Saharan Africa and reached a final close of USD 254m.

In recent years, investment from commercial investors, particularly pension funds and endowment funds has increased, reducing the concentration of development finance institution (DFI) funding within the private equity industry.