What does Africas private equity landscape look like in 2021?
The continent itself hosts over 400 private equity, venture capital and asset management firms, while another 200 firms from around the world have a strong Africa focus to their portfolios. By documenting the buy-side and sell-side relationships on investment activity through our African deal tracking over the past six years, Asoko Insight has collated details on active deal-makers, creating an increasingly comprehensive picture of the investor landscape. Investors are spread across the continent, with offices concentrated in major markets, led by South Africa, which is home to 174 investor headquarters or regional head offices. Other major hubs are Nigeria (63), Kenya (48), Mauritius (24), Egypt (20). Outside of Africa, the US has the largest number of investors (83) with significant deal activity on the continent, though as a whole, Europe has a slightly larger number of investors (87). Asia and the Middle East are comparatively smaller source markets for Africa-focused investment, with 25 investors profiled. China is the leading Asian market for investors, though their activity is overshadowed by the significant investment of the Chinese state under the auspices of the Belt and Road initiative. Assets under management (AUM) are known for approximately a third of investors, ranging from under $1m to well over $1bn. Just under 10% of firms are known to manage more than $1bn in assets, with some 50 firms in this category. Another 65 of those with known AUM, manage less than $1m, leaving about 40% of firms in between. Africa Insight Wake up to the essential with the Editor's picks. Sign up Also receive offers from The Africa Report Also receive offers from The Africa Report's partners SUCCESS ERROR  READ MORE African family-owned businesses are becoming more open to investment  Investor preferences are recorded for a portion of the 600-strong dataset, covering sector and geographical focus as well as targeted ticket size. Although the majority of firms are generalist, others have narrower targets. In terms of geography, Southern Africa is the most common focus area for investors, while the smallest number reveal a Central African focus. As is borne out in investment figures, financial services and IT are the top two sectors of focus among investors. Deal analysis by Africa Venture Capital Association (AVCA) shows that investment in tech-enabled companies accounted for 55% of all deals in Africa in 2020, while financial services, IT and consumer discretionary made up 47% of deal volume that year. African investors are increasingly aligning their investment strategies with the strong demand for capital in the middle market. Close to 25% of investors record a preference for deals between $1m and $5m, followed closely by a preference for ticket sizes of $5m  $10m and $10m  $25, at just over 20% each. Effects of Covid-19  In 2020 some $3.3bn was invested into businesses on the continent, according to AVCA, slightly down on the 2019 figure of $3.8bn, but a strong showing given the challenging conditions of the year, which the world spent largely in lockdown and focused investor attention on supporting portfolio companies make it through the storm. Reviving the growth trajectory investment had been experiencing prior to the pandemic will be crucial to the continents recovery. The article continues below Free download Get your free PDF: Top 200 banks 2019 The race to transform Complete the form and download, for free, the highlights from The Africa Reports Exclusive Ranking of Africas top 200 banks from last year. Get your free PDF by completing the following form Email Address * Title * Last name * First name * Country * Industry * Position * Get information from Jeune Afrique Media Group: subscription deals, special offers Close By downloading this PDF you agree to subscribe to The Africa Report Daily newsletter SUCCESS ERROR  Global growth estimates show sub-Saharan Africa making the slowest progress of any region coming out of the economic crisis, with the IMF forecasting 3.4% growth for the region in 2021, compared to a global average of 5.5%. With African economies driven by the SME sector, mid-cap deals will be increasingly crucial to support development of the private sector. Africas vibrant investor universe is well placed to step up to the test. Rob Withagen is co-founder and CEO of Asoko Insight, Africas leading corporate data and engagement platform, providing global investors, multinationals and development institutions the most effective route to discover, shortlist and engage their target universe of African companies. Learn more at www.asokoinsight.com.