African Private Equity Investments Up One Third

After the embarrassing comments on China made in a private meeting with the head of GE, is the bloom off the Asian rose? The GE leader mentioned that GE would be exploring Africa. It appears that Private Equity is catching that African fever too. Financial Times reports:

Private equity investors have started to put more money to work in emerging markets following a sharp fall in allocations during the financial crisis. Funds targeting the region raised $11bn (£6.8bn, €8.3bn) of fresh investment in the first half of 2010, up from $9bn in the same period last year, according to the Emerging Markets Private Equity Association“African funds raised through June already exceeded the full year 2009 total, and some sizeable funds being raised point to a return to pre-crisis levels,” said Sarah Alexander, president of Empea.

More than a third of institutional private equity investors are currently making allocations to Africa, compared to just 4 per cent four years ago, according to Empea.

Emerging Capital Partners, a US house, said last month it had raised $613m for a fund dedicated to the continent, while Aureos Capital said earlier in the year it had amassed $381m for a vehicle targeting smaller and medium-sized African companies.

The volume of transactions by emerging markets private equity funds has also picked up “significantly” since the crisis, according to Empea, a Washington, DC-based trade body. Some $13bn of deals were struck in the first half of the year, up from $8bn in the same period of 2009, while the number of transactions rose 44 per cent to 402, led by a “surge” into Latin America, China and India.

“There are more and better quality deals in the pipelines; the continued easing of price expectations among sellers means managers have been more successful in closing transactions. Emerging market fund managers are increasingly bullish in light of stabilising markets and lower valuations,” said Ms Alexander..