Finance


PRIVATE EQUITY EXITS iStockphoto


improving the EXIT STRATEGY


Investors remain unconvinced of Africa’s private equity boom story, citing the lack of strong exit options. But this is set to change as more capital flows into the continent and investors find increasingly innovative ways to exit their stakes. Gail Mwamba reports


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frica’s private equity industry has in recent times enjoyed the limelight of global media, as global investors look to take a


slice of the continent’s appetising growth prospects. The private equity interest in the region has been evidenced by Helios Investment Partners recently closing a US $900 million mega-fund, the largest Africa-focused private equity fund in history. Although the size of the fund has been at the centre of discussions, the fact that the fund managers raised 72% of their capital from non-developmental investors is even more noteworthy. Africa is increasingly entering the emerging markets private equity


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mainstream after years of investors side-stepping the region in favour of the more popular hotspots, such as Brazil and India. According to research by the Emerging Markets Private Equity Association (EMPEA), Africa now makes up almost 10% of global emerging markets fundraising figures, from less than 1% a decade ago. The entry of global brand-name private


equity fund managers into the market, such as Carlyle, has also shone a spotlight on the continent. The US-based giant turned heads earlier this year when it announced that it was setting up offices in Africa, with plans to deploy an estimated $750m across continent. For those in the know, the significance


of Carlyle lies in its ability to create a path for other global giants to enter the space, as the fund manager belongs to an elite group of private equity houses that are the movers and shakers of the global industry. The fund manger was ranked as the second-largest global private equity group by Private Equity International in 2010. Western governments are also waking


up to the significance of Africa’s private equity industry. On his recent trip to Africa, UK Prime Minister David Cameron was sure to include key private equity advisors in his 25-man entourage, including Rod Evison, the Commonwealth Development Corporation’s (CDC) Managing Director for Africa and Aureos Capital’s Chief Executive Officer, Sev Vettivetpillai.


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