According to research by Asoko Insight and Africa Capital Digest in Q4 2018, there are about 212 private equity investment firms with 298 offices based across 27 sub-Saharan African markets. This does not include firms that may have an Africa focus but are not based on the continent.
The new research shows that the ten largest firms, defined by funds under management (FUM) exceeding $1 billion, include Actis, African Capital Alliance, African Infrastructure Investment Managers (AIIM), Brait, Development Partners International (DPI), Emerging Capital Partners (EPC), Harith General Partners, Helios Investment Partners, Investec Asset Managements and Old Mutual Capital.
The next range, with FUM between $500 million and $1 billion, includes eight firms, followed by the $100 million to $500 million range, which includes 63 firms among them being TLcom Capital LLP, who is a member of Nairobi Garage. 71 firms are documented with FUM of less than $100 million, and the remaining firms include investors with unknown fund sizes or with non-fund-based capital structures.
The new study further reveals that South Africa is the market leader with 40% of the PE offices located there, followed by Kenya with 14% and Nigeria with 13%. Aside from Mauritius and Ghana, all other countries have less than 10 PE offices in operation.
Regarding sectors of focus, the plurality of firms, 39%, are generalists pursuing sector-agnostic investment strategies. The most notable sectors then targeted include the financial services and consumer spaces, followed closely by healthcare, agribusiness, technology and real estate. The “Other” category includes a combination of mining, oil and gas, logistics and transportation.
A total of 18 SSA-based firms each manage over $500 million in FUM. South Africa, Kenya and Nigeria are unsurprisingly the home to most of these firms.
The report also shows that US fast food giant Burger King is one of the multinationals also looking to expand its wings into Sub Saharan Africa. Burger King believes it is under-penetrated in a continent with huge opportunities and potential.