Private Equity

This research aims to highlight the current state of the private equity market in Africa, and trends in prices paid for private equity assests over time.

Introduction

This Bright Africa Private Equity report focuses on the PE ecosystem in 2021 – including fundraising, dry powder, investments and pricing – and considers some interesting trends.

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Fundraising over time

Before the remarkable market contraction in 2020 and 2021, private equity (PE) fundraising activity across Africa showed strong growth between 2016 and 2019.

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Dry Powder

We have estimated the dry powder of the African Private Equity Industry, using fundraising data and the average deployment period RisCura observed.

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Investment activity over time

The extent to which supply of investable opportunities exists cannot be observed directly. However, the level of deal activity at which investors make such investments can be measured.

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Exits

The volume of exits and the quality of exit routes available in Africa have been key concerns for investors looking to access African PE. However, data shows that exits are taking place in Africa.

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Changes in perceived risk and reward

The perception of risk and returns, compared to other investment opportunities, influences the PE market. We explore the theoretical cost of equity, which reflects the perceived risk of the different markets.

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Private Equity Pricing

Many of the drivers of price changes are unobservable, so it is often difficult to interpret changes over time. We assess the data available.

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Conclusion

When looking at the prices for private equity assets in South Africa and Africa and the landscape that influences it, we can see market fundamentals reflected.

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