Private Equity - Tanzania | Statista Market Forecast

The deal value in the Private Equity market is projected to reach US$4.47m in 2024.
It is expected to show an annual growth rate (CAGR 2024-2025) of 11.49% resulting in a projected total amount of US$4.99m by 2025.
The average size per deal in the Private Equity market amounts to US$2.06m 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 2.97 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 Tanzania has seen minimal decline recently, influenced by factors such as economic fluctuations, investor apprehension, and regulatory challenges, which collectively hinder substantial investment growth and confidence in potential returns.

Customer preferences: In Tanzania, evolving consumer preferences are shaping the Private Equity landscape, with a growing interest in sustainable and socially responsible investments. Young, urban populations are increasingly inclined towards businesses that prioritize environmental sustainability and social impact. Additionally, the rise of the middle class is driving demand for services in healthcare, education, and technology. This demographic shift is prompting investors to seek opportunities that align with these changing consumer values, indicating a significant trend towards impact-driven ventures that promise not only financial returns but also positive community outcomes.

Trends in the market: In Tanzania, the Private Equity market is experiencing a notable shift towards sustainable investment strategies, driven by a rise in ethical consumerism among younger demographics. Investors are increasingly prioritizing ventures that demonstrate environmental stewardship and social responsibility, particularly in sectors such as renewable energy, agribusiness, and technology. The expanding middle class is fueling demand for innovative solutions in education and healthcare, prompting equity firms to adapt their portfolios accordingly. This trend signifies a transformative approach, offering both financial gains and substantial community benefits, ultimately reshaping stakeholder engagement and investment strategies in the region.

Local special circumstances: In Tanzania, the Private Equity market is shaped by unique local factors, including its youthful population and rich natural resources. The country’s diverse ecosystems promote investment in sustainable sectors, particularly renewable energy and ecotourism. Cultural values around community and sustainability drive investors to prioritize social impact alongside financial returns. Additionally, supportive regulatory frameworks, such as incentives for green investments, foster a conducive environment for private equity firms. This blend of demographic, environmental, and regulatory elements distinctly influences investment strategies in the region.

Underlying macroeconomic factors: The Private Equity market in Tanzania is significantly influenced by macroeconomic factors, especially central bank policies and interest rates. A stable interest rate environment encourages borrowing and investment, making it easier for private equity firms to raise capital for new ventures. Conversely, rising interest rates can dampen investment enthusiasm as the cost of financing increases. Moreover, Tanzania's economic health, reflected in GDP growth and inflation rates, affects investor confidence and risk appetite. Global economic trends, such as foreign direct investment flows and commodity prices, also play a crucial role in shaping the private equity landscape, guiding firms to sectors that promise sustainable returns amidst shifting market dynamics.

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.