“Following record fundraising levels in 2014 and 2015, many Sub -Saharan African fund managers are in a deployment phase. Consequently, while an additional US$724 million was raised for the region in 1H 2016, it represented a 75% drop, year-over-year. Yet, the fall in commodity prices and currency volatility in several key markets delayed the deployment of capital; capital invested in the region declined from US$652 million in 1H 2015 to US$584 million in 1H 2016, while deal count was on par.
Similar to the slowdowns seen in other regions due to the market conditions of regional leaders, capital invested in South Africa declined 59%, year-over-year. Deal count increased slightly in South Africa and moved from 11 to ten in Nigeria, the region’s other anchor market. While Nigeria experienced uncertainty over the future value of its currency, the naira, slowing down deal activity in 1H 2016, the third quarter opened with Nigeria-based Beloxxi receiving an US$80 million investment from African Capital Alliance, 8 Miles and DEG. While too soon to call a turn, the deal was an encouraging sign of investor confidence in the market.
Mirroring the pattern experienced in other EM regions, the number of deals completed in the consumer services and consumer goods sectors declined in Sub-Saharan Africa in the first half of 2016. Financials led all other sectors in deals completed in the region with a total of ten, while the power sector also retained the favor of fund managers, as demonstrated by Denham Capital’s US$250 million commitment to regional renewable energy development platform Greenwish Partners.”
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Source: (EMPEA – EMPEA is the global industry association for private capital in emerging markets.)
