Africa Development Forum: Experts look at ways to attract Private Equity investment in Africa
Although it experiences strong economic growth, Africa is struggling to attract Private Equity (PE) and international investment capital.Although it experiences strong economic growth, Africa is struggling to attract Private Equity (PE) and international investment capital.
About $300 billion (€236.8 billion) was raised globally for Private Equity last year, but only three per cent ($1.2 billion) went to Africa-focused funds, said Mike Casey, the director of EMPEA Consulting, quoted by Ventures.
He pointed out during a plenary focused on PE at the Africa Development Forum in Marrakech that "the biggest challenge global institutional investors see when they approach Africa is the lack of established fund managers."
Participants at the forum said that while private investors face many challenges when investing in Africa, the Private Equity industry on the continent was at a potential turning point, with small and medium-sized enterprises (SMEs) being central to its development.
Nathan De Assis, executive director of Equity Capital Resources, said that SMEs are the key engine of African growth and that investors such as pension funds should provide resources to small businesses to help them grow.
"Once SMEs grow, the larger players within the market can pick them up and bring them to the next level," he said.
David Ashiagbor of the African Development Bank (AfDB) said the rapid growth of the Pension Fund industry could provide a great source of capital for the PE industry, Ventures reports.
however, that there was need for regulatory reform to ensure that this capital base can be accessed.