Capital returned to private-equity investors doubled in 2016, despite tepid economic growth across Africa, the latest Southern African Venture Capital and Private Equity Association survey shows.
These investors pocketed R18.3bn, or 123.2% more than in 2015. This was about twice the capital that pension funds, development financiers and insurers invested initially.
The increase took place against a difficult economic backdrop in sub-Saharan Africa, with growth in the region falling to 1.4%, the lowest growth rate in more than 20 years, according to the IMF.
“We’re finding that a lot of fund managers are holding on to assets a little bit longer than what is the norm due to the economic environment,” said association CEO Tanya van Lill.
Investors were not fazed and they stayed put because of the lucrative nature of the asset class, which had delivered a 11.4% annual growth rate in capital returned to investors since the association began its survey, which covered 61 participants representing 96 funds in 2017.