Kenya Takes The Lion’s Share In Private Equity Funds Into The East Africa Market

Kenya Takes Lion’s Share in Private Equity Funds into the East Africa Market

Kenya is seen as an economic powerhouse within the East African region and thus attracts the greatest percentage of private equity (up to 60%) invested in the region. For the last seven years, Kenya has consistently come on top of its neighbors Ethiopia, Tanzania, Uganda and Rwanda and is the most desirable stop for international investors looking to do business in the region.

A recent survey dubbed the East African Private Equity Survey done by KPMG and the East Africa Venture Capital Association (EAVCA). Showed that out of the Ksh.78.9 billion ($822 million) invested in the region, Ksh.49.7 billion ($516,287,079) went to Kenya. The survey took into consideration the time between 2007 to 2014, and it emerged that 328 private equity (PE) deals flowed into the East African region, with Kenya taking 63% of these deals. After Kenya in decreasing order is Tanzania and Ethiopia that got 12 and six deals respectively.

A director at Deal Advisory business unit at KPMG, Sheel Gill, said, “Of the total global PE funds raised globally, $3.7 trillion for the 2007-2014 period, which is approximately 0.6%, is earmarked for Africa and 0.04% for East Africa.”

Gill further said that the companies survey managed to raise private equity to the tune of Ksh.172.8 billion ($1.8 billion), out of which only Ksh.49.7 billion were committed.

The companies still have a lot of private equity to invest in the coming period,” Gill added.

Most of these private equities went to the following sectors: agriculture (27%), financial services (14%), fast moving consumer goods (11%), ICT (10%) and healthcare (9%). These five sectors account for 71% of the total of the 79 reported deals.

The majority of these funds are injected into target businesses either through limited partnerships or direct investment arms of the GPs (General Partners) and LPs (Limited Partners) for growth and expansion through equity deals,” Gill further added.

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