Private equity (PE) investment in Africa is changing. Fund managers are adopting facilities that are used in developing markets, such as subscription credit.
PE deals in Africa totalled US$8.1 billion last year, according to the African Private Equity and Venture Capital Association (AVCA). This is the second highest on record after the US$8.3 billion posted in 2007. As capital that is looking to be deployed in Africa increases and competition for Africa PE deals hots up, financing techniques and instruments used by PE in developed markets are now being utilised by African PE funds. Whilst it will be a while before we see a true PE leveraged finance deal, we are increasingly seeing the emergence of the "subscription credit facility".
This article was first published in African Banker 4th Quarter 2015 Issue 34.
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