With about $4.0 billion, Nigeria took half of the total $8.1 billion private equity (PE) investment inflow into Africa in 2014, making the economy the most attractive to PEs during the year.
PE funds invested $8.1 billion in African companies over 2014, the second highest total ever after the $8.3 billion in 2007, according to new data from the African Private Equity and Venture Capital Association (AVCA).
The largest single inflow to Nigeria came from Washington D.C.-based Emerging Capital Partners, which organised $3.15 billion in funding for Nigeria-based cell phone tower operator, IHS. The investments were channelled to the acquisition of 2,100 towers from Etisalat Nigeria and 9,150 towers from MTN Nigeria in addition to the construction of new towers as well as upgrade existing towers with solar power systems and efficient generator units.
Another telecom deal, $630 million from U.K.-based Helios Investment Partners, went to Helios Towers Africa —a business backed by George Soros’ Soros Fund Management and Madeleine Albright’s Albright Capital Management.
The other major beneficiary is Diamond Bank Plc which got inflow from a private equity giant, Carlyle Group, USA amounting to $147 million.
In a special report on Africa-focused PE investments, CNBC Africa had indicated that the continent was looking good for foreign investments in recent years, adding: “Africa, once off the radar of many investors, continues to rise as a destination for private equity firms. The record levels of 2014 show that PE continues to attract local and foreign institutional investors looking to diversify their portfolios,” AVCA head of research, Dorothy Kelso, said.
However, in a related development, PE firms exited 40 companies in Africa within the same period, 2014, a 38 per cent increase from 29 exits in 2013, and the largest total since 2007, when there were 34 exits.
Financial services remained the most common sector for exits in 2014 (20 per cent). Health care was the second (18 per cent) followed by personal and household goods (10 per cent) and retail (8 per cent).
