East Africa attracts Sh113.7b in private equity investments
The East Africa region attracted more than Sh113.7 billion ($1.1 billion) funds from Private Equity (PE) between 2015 and 2016, a new study has revealed.
According to the survey conducted by KPMG and East Africa Venture Capital Association (EAVCA), PE funds to the region increased from 36 deals recorded in 2014 to 72 last year.
Sheel Gill, the head of Deal Advisory, East Africa at KPMG said the region is emerging as a favourite investment destination for funds raised through the PE and venture capital funds. Gill said between 2015 and 2016, an estimated total of $1.1 billion (Sh113.69 billion) was raised for the private equity investment in East Africa.
She said 28 private equity and venture capital funds participated in this year’s survey compared to 18 in the first survey covering 2007 to 2014. “The positive economic story recorded in the region has a direct correlation to the growth of the private equity and venture capital sector during the period between 2015 and 2016,” she said.
Gill disclosed that agribusiness, financial services and energy top the PE that were directed to Kenya, adding that the country remains the most popular investment destination in the region. Other PE investments in Kenya are in the natural resources, retails and fast-moving consumer goods sectors.
She said Kenya continues to experience the lion’s share of the deals in the East Africa region, with approximately 50 per cent of the 115 PE-backed deals. The total value of PE-backed deals in East Africa during 2015 to 2016 is estimated at $600 million (Sh62 billion), bringing the total value up to $1.4 billion (Sh144.69 billion) from 2007 to 2016.
Eva Wariga, executive director of EAVCA said the average number of deals reported per year increased to 18 per cent for the period between 2015 and 2016 compared to nine per cent in an earlier survey in 2014.