Private Equity - Africa | Statista Market Forecast

The deal value in the Private Equity market is projected to reach US$840.00m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 7.24% resulting in a projected total amount of US$900.80m by 2025.
The average size per deal in the Private Equity market amounts to US$10.58m in 2024.
From a global comparison perspective it is shown that the highest deal value is reached United States (US$594.00bn in 2024).
In the Private Equity market, the number of deals is expected to amount to 91.54 by 2025.

Definition:

Private equity involves partnerships that buy, manage, and eventually sell companies. These firms manage funds for institutional and accredited investors, who commit significant capital for extended periods. Private equity funds can acquire entire private or public companies or participate in buyouts with other investors, but they typically avoid holding stakes in publicly traded companies. The Private Equity market encompasses a broad range of deal types that involve acquiring equity ownership in private companies. This market typically includes leveraged buyouts (LBOs), growth capital, Carve-outs, and other forms of equity investments that target mature businesses with the potential for operational improvements and value creation. The market presented here does not include Venture Capital investments. While both Private Equity and Venture Capital involve equity stakes in companies, Venture Capital specifically focuses on high-growth potential startups, while private equity firms invest in established companies with the aim of increasing the value of these companies before selling their investment after several years.

Additional information:

The market contains the following KPIs: the deal value, the number of deals, the average deal size as well as the assets under management (AUM). Key players in this market are companies such as Blackstone, The Carlyle Group, KKR, Goldman Sachs, General Atlantic, and Warburg Pincus.

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Leveraged Buyouts (LBOs)
Growth Capital
Carve-Outs
Distressed Buyouts
Secondary Buyouts

Venture Capital
Venture Debt
Traditional bank loans
Digital capital raising

The Private Equity market in Africa is witnessing minimal decline, influenced by factors like geopolitical stability, improved regulatory environments, and growing investor interest, despite challenges such as economic volatility and infrastructure deficits impacting growth prospects.

Customer preferences: The Private Equity market in Africa is shifting toward sustainable and impact investing as investors recognize the growing importance of corporate social responsibility. There is a notable increase in interest for ventures that prioritize environmental sustainability and community development. Additionally, as urbanization accelerates and younger demographics rise, consumer demand for innovative tech solutions in sectors like e-commerce and fintech is growing, prompting private equity firms to align their portfolios with these evolving trends and aspirations for economic empowerment.

Trends in the market: In Africa, the Private Equity market is experiencing a surge in interest towards sustainable and impact investments, with a growing number of firms prioritizing social and environmental governance frameworks. As urban populations expand and tech-savvy youth emerge, there’s a notable inclination towards funding innovative startups in sectors like e-commerce and fintech. This shift not only aligns with global sustainability goals but also meets the increasing demand for responsible investment. Such trends signal significant opportunities for industry stakeholders to drive economic growth while contributing positively to societal challenges.

Local special circumstances: In Africa, the Private Equity market is notably shaped by diverse geographic and cultural landscapes, where unique local dynamics foster a vibrant investment ecosystem. Regions rich in natural resources attract capital focused on sustainable industries, while cultural nuances drive demand for localized products and services, particularly in agribusiness and renewable energy. Additionally, varied regulatory frameworks across countries influence investment strategies, compelling firms to tailor their approaches. This environment not only encourages innovation but also promotes investment in ventures addressing pressing social issues, thereby enhancing overall market resilience.

Underlying macroeconomic factors: The Private Equity market in Africa is significantly influenced by overarching macroeconomic factors, particularly central bank policies and interest rates. Low interest rates facilitate easier access to capital, encouraging private equity firms to pursue investments in high-potential sectors such as technology and renewable energy. Conversely, rising rates can constrain credit availability, impacting deal-making capacity and valuations. Additionally, inflation rates affect the cost of goods and services, necessitating adaptive strategies for portfolio companies. Global economic trends, such as commodity price fluctuations and investor sentiment, further shape capital flows into the market, while national economic health and fiscal policies establish a conducive environment for investment.

Data coverage:

The figures are based on deal value, number of deals, the average size of each deal, and assets under management within the Private Equity market.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use annual financial reports of key players, industry reports, third-party reports, and publicly available databases. In addition, we use relevant key market indicators and data from country-specific associations, such as: GDP, total investment (% of GDP), household wealth (per Adult), high income (% of population), and number of high-net-worth individuals (HNWI). This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are total investment (% of GDP), household wealth (per Adult), number of high-income persons, and number of high-net-worth individuals (HNWI).

Additional notes:

The market is updated twice a year in case market dynamics change.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

In the last decades, private equity has emerged as a dominant force in global finance, reshaping industries and driving economic growth worldwide. After the peak experienced in 2021, however, private equity activity slowed down in 2022 and 2023, due to multiple factors such as inflationary headwinds, rising interest rates, geopolitical unrest and general uncertainty. With an estimated value of nearly four trillion dollars, private equity dry capital - a term commonly used in the private equity world to refer to committed, but unallocated capital - reached unprecedented heights in 2023. A high level of this capital means that private equity firms have unspent cash reserves. Among the most influential private equity firms worldwide, the Blackstone Group is the largest in terms of funds raised.