12 °c
London
Monday, December 11, 2023
No Result
View All Result
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
FurtherAfrica
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About
No Result
View All Result
FurtherAfrica
No Result
View All Result
Home Botswana

Private Equity Builds African War Chest Amid Commodity Rout

FurtherAfrica by FurtherAfrica
March 1, 2016
in Botswana, Economy, Eswatini, Ethiopia, Finance, Ghana, Industry and Commerce, Kenya, Malawi, Mauritius, Mozambique, Namibia, Private Equity, SADC, South Africa, Uganda, Zambia, Zimbabwe
Reading Time: 2 mins read
0 0
0

Private-equity companies amassed a $4.3 billion war chest for investment opportunities in Africa last year as the global commodity rout and weakening local currencies cut prices of potential target companies.

The fundraising was the highest since at least 2010 and compares with $1.9 billion in 2014, according to the London-based African Private Equity and Venture Capital Association. The industry group represents investors such as Dubai-based Abraaj Group Ltd., which raised $990 million in its Africa Fund III, and London-based Helios Investment Partners LLP with $1.1 billion in its Investors III Fund.

As commodity prices collapsed around the world over the past year, the South African rand tumbled 26 percent against the dollar, the Zambian kwacha is down 40 percent and the Mozambican metical lost 31 percent. Nigeria is under increasing pressure to devalue the naira, with forward currency markets predicting it will weaken by 20 percent over the next three months.

“We’re trying to look for companies that benefit from a weaker currency, that are capable of exporting,” said Shaun Zagnoev, a partner at Ethos Private Equity Ltd. in Cape Town. The company raised $800 million for its latest Fund VI. “During periods of uncertainty there’s often increased deal opportunity.”
Ethos sold companies acquired by its first four funds and is in the process of exiting the fifth, according to spokeswoman Chelsea Wilkinson. Fund V’s projected net internal rate of return, a measure of the profitability of its deals, will be 18 percent to 20 percent, the company said last month.

Lower Valuations

Carlyle Group LP, the world’s second-largest manager of investment alternatives to stocks and bonds, is targeting banking, consumer goods, manufacturing and back-office automation services in Africa, according to Marlon Chigwende, manager of the New York-based company’s $698 million African fund.

“Valuations are lower and getting lower over time,” Chigwende said by e-mail. “This is presenting interesting opportunities over the medium-term, as we see sound businesses attracting softer valuations. Liquidity is also becoming an issue in many economies, which also opens up opportunities for private equity investors.”

african_was_chest

Investors are waiting for Nigeria to devalue the naira and make it easier to transfer dollars out of Africa’s largest economy before committing cash, according to Natalie Kolbe, an investment principle at London-based Actis LLP. The firm has $7.6 billion under management, with about $3 billion invested in businesses on the continent, including $300 million in Nigeria.

Restrictions on access to foreign currency were imposed by Nigeria’s central bank last year, while Ethiopia requires exporters to convert 90 percent of their foreign exchange into local currency. Bank of America Corp., the largest distributor of dollars to Angola, stopped deliveries to Angola in November after the Financial Action Task Force urged the government of Africa’s second-largest oil producer to increase anti-money laundering efforts.

“Assets look very cheap on a dollar basis,” Kolbe said by phone from Johannesburg. “Investors need to know they can get their capital out. The moment there is any type of capital restriction, you find that the foreign buyers start to slip onto the sidelines and adopt a wait-and-see attitude.”

Source: Bloomberg

Related

Tags: Abraaj GroupActisafricaCarlyle Groupcurrency devaluationEthos Private EquityHelios Investment PartnersinvestmentPrivate Equity
FurtherAfrica

FurtherAfrica

Founded in 2015 FurtherAfrica is an online platform centralising news and content focusing on the development and growth story of the African continent.

Related Posts

Finance

AfDB approves US$66M for equity of Tanzania Agricultural Development Bank

by Hercilio Simao
December 11, 2023
Economy

Mozambique strengthened international reserves in November

by 360 Mozambique
December 10, 2023
Travel

Top clubs to rave in Nairobi 2023

by See Africa Today
December 9, 2023
Africa

AfDB warns of US$25B drain on Africa with new EU carbon tax

by The Exchange
December 8, 2023
Finance

Mastercard Foundation Africa Growth Fund Invests in 3 Funds

by Africa Global Funds
December 8, 2023
Mozambique eVisa
 
MozParks

Translate this page

Read the Latest

Development

Angola to build new satellite cities at affordable prices

by FurtherAfrica
December 11, 2023
0

The Angolan government plans to build satellite towns with affordable housing for the low-income population, in order to alleviate the...

Read more

Zanzibar’s quest to become Africa’s new tech hub

December 11, 2023

Dar Al-Handasah and Sun Africa to collaborate on renewable projects in Angola and Nigeria

December 11, 2023

AfDB approves US$66M for equity of Tanzania Agricultural Development Bank

December 11, 2023

COP 28: Oil & gas producers adamant amid the energy transition pressure

December 11, 2023

FurtherAfrica Partners Network

The Exchange Farmers Review Africa 360 Mozambique
TechGist Africa Energy Capital & Power Club of Mozambique
Taarifa Rwanda Web3Africa See Africa Today
Africa Global Funds Novafrica CrudeMix Africa
Harambee Africa Botswana unplugged Financial Insights Zambia
O Económico Digilogic Africa  

Subscribe to FurtherAfrica

Enter your email address to receive new articles on your email.

Join 107.2K other subscribers
FurtherAfrica

© 2021 FurtherMarkets

FurtherAfrica is a FurtherMarkets Limited platform

  • Countries
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

Follow Us

No Result
View All Result
  • Countries
    • Angola
    • Botswana
    • Cape Verde
    • DRC
    • Eswatini
    • Ethiopia
    • Kenya
    • Malawi
    • Mauritius
    • Mozambique
    • Namibia
    • Nigeria
    • Rwanda
    • South Africa
    • Tanzania
    • Uganda
    • Zambia
    • Zimbabwe
  • Interviews
  • Understanding
  • Videos
  • Travel
  • Weekend
  • About

© 2021 FurtherMarkets

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?
 

Loading Comments...