The Emerging Markets Private Equity Association has just released its private equity industry statistics for the first six months of 2012. In the first half of the year emerging market fundraising is on pace to be slightly lower than 2011. Several pan-regional funds had very large closes while funds investing in Latin America or Africa had a smaller share of the emerging market total.
The story in Africa is one of deals closing amid a sluggish fundraising climate. Africa’s share of emerging market fundraising is down slightly in the first half of 2012. Meanwhile contrary to emerging markets as a whole, investments in Africa are on pace to increase in 2012 compared to 2011. One could speculate that there is excessive risk aversion towards Africa caused by concerns about institutional strength and political risk. Consequently general partners are finding a steady stream of deals in the pipeline and available funds are quickly invested. Given the growth potential in energy and other sectors and the urgent need for improvement in housing and all manner of infrastructure, there will be no shortage of potential deals to be constructed.
The African investment landscape suggests a need to better inform investors and assist them in evaluating and managing