The African private equity investor landscape has evolved significantly, with Preqin tracking 87% more LPs in the region than it did five years ago. At present, Preqin’s Investor Intelligence online service currently tracks 77 LPs based in Africa that invest or are considering investing in the private equity asset class. Although Africa-based LPs make up only 1% of the investor universe, they still represent an important source of capital for fund managers; investors based in the region have an aggregate $798bn in assets under management.
Banks are the most prevalent Africa-based institutional investor, representing 23% percent of LPs, while insurance companies (17%) and private sector pension funds (16%) are also prominent players. Notably, the largest investor within the region is Public Investment Corporation, a South Africa- based asset manager that allocates $6.9bn to private equity. Perhaps unsurprisingly, 93% of Africa-based LPs are seeking investment opportunities domestically.
In terms of fund preferences, the chart below illustrates the array of funds that attract the attention of Africa-based LPs. The primary destination for Africa-based capital is domestic, driving the interest among investors for venture capital and growth strategies that seek to take advantage of the emerging economies and favourable demographics on the continent.
Twenty-two percent of Africa-based LPs are looking to make new commitments to private equity funds over the next 12 months. Debswana Pension Fund is a Botswana-based investor that will be active in the asset class in the next 12 months. The private sector pension fund will look to invest $16mn in an array of fund types globally. Morocco-based insurance company, CNIA SAADA Assurance, is another investor that will look to commit to buyout vehicles in the coming year, seeking domestic opportunities as well as targeting West Africa.