African Private Equity Fundraising Fell in 2020 Due to Pandemic

Tuesday, March 30, 2021 / 11:45 AM / By Chijioke Ohuocha ofReuters / Header ImageCredit: FurtherAfrica

Africanprivate equity raised less cash for investments in 2020 compared with theprevious year as a result of the economic fallout of the COVID-19 pandemic, theAfrican Private Equity and Venture Capital Association (AVCA) said.

Privateequity funds investing on the continent raised $1.2 billion last year, downfrom $3.9 billion the previous year, AVCA said in its Annual African PrivateEquity Data Tracker seen by Reuters on Tuesday.

Africanprivate equity raised $4.3 billion in 2015.

"2020saw a decrease in fundraising numbers, as a result of the economic effect ofthe pandemic," the association said.

Thecoronavirus pandemic has stalled Africa's growth momentum. Though the continenthas started to recover, although with regional disparities, full recovery isdifficult to predict, the AVCA said.

Thetotal value of private equity deals in Africa dropped to $3.3 billion lastyear, from $3.8 billion in 2019, due to the pandemic, the AVCA said.

Dealsannounced during the period included Helios Investment Partners' agreeing toacquire a stake in Africa Specialty Risk Group and Old Mutual AlternativeInvestments buying a stake in Sifiso Learning Group of South Africa.

AVCAsaid deals in technology-enabled companies accounted for more than half of thetotal deals in 2020. Healthtech, fintech, edtech and agritech were among thetop picks.

"Thepandemic and subsequent lockdown restrictions showcased the viability of somesectors and presented new investment opportunities."

Atotal of $18.1 billion was raised by African private equity funds between 2015and 2020, AVCA said. There were 1,257 private equity deals worth $21.7 billionduring that period, the association added.

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The post African Private Equity Fundraising Fell in2020 Due to Pandemic first appeared in Reuters.com on March 30, 2021.