Fifteen MENA and Sub-Saharan Africa (SSA)-based unlisted infrastructure funds reached a final close since 1996 raising an aggregate $6bn, with an average fund size of $431mn. GPs located in the MENA and SSA region have seven funds currently on the road, seeking to raise an aggregate $3.3bn in investor capital. The most prominent region for infrastructure fund manager activity is South Africa, with 71% of funds currently raising capital and 33% of capital raised by closed funds managed by South Africa-based firms. Thirty-three percent of closed funds are managed by firms based in the UAE, although no UAE-based managers are currently raising a fund. The remaining 29% of funds on the road are managed by Morocco-based firms.
Sixty-four percent of MENA and SSA-based funds focus their investments in Africa. Twenty-three percent focus on the Middle East & Israel, 9% target Asia and the remaining 5% are diversified in terms of primary geographic focus. The most prominent industry sector targeted is transport, with 86% of funds closed and raising including the sector in their investment remit. Other notable industries include utilities (63%), telecom (55%), waste management (45%) and renewable energy (45%).
In terms of investors, 5% of the active infrastructure investor universe is located in the MENA and SSA region. Of these investors, 57% are based in the Middle East, 32% in Sub-Saharan Africa and 12% in North Africa. In these three sub-regions there are three prominent countries – UAE, which accounts for 24% of all investors in the MENA and SSA region, South Africa, which accounts for 20%, and Morocco, which accounts for 8%.
Looking at the wider infrastructure investor universe, 8% of active investors are open to infrastructure investment opportunities in the MENA and SSA region, of which an additional 3% are not located in the region. Europe-based investors account for 23% of the worldwide total, North America 17% and Asia 8%. The average current allocation to infrastructure for investors open to investing in the region is 7% of total assets, and the average target allocation is 7.7%, showing that, in general, these investors have capital available to invest.
In terms of deal flow for the region, there have been 146 MENA and SSA-based infrastructure deals completed since 1999. Sub-Saharan Africa is the most active area in the region for infrastructure deals, with 61% of deals made in such assets. Twenty-two percent of deals were made in assets located in the Middle East and 16% in North Africa. Those deals made in the utilities sector account for the highest proportion of any other industry, with 25%.