Mark Mobius, who oversees $53 billion in emerging markets, was considering private equity investments as a way of tapping growth in Africa, he said on Friday.
“We are looking at the private equity side of things in Africa,” Mobius, the executive chairman of Templeton Emerging Markets Group, said. Templeton has about $1 billion (R10bn) invested in Africa.
The potential generated by the continent’s 1 billion consumers had created a $25bn private equity industry, said Michelle Essome, the chief executive of the London- based African Venture Capital Association. Actis Capital and Ethos Private Equity are among those hunting for private equity opportunities in Africa to supplement the investment options provided by growing debt and equity markets.
Between 2007 and 2012 private equity fund managers exited 118 investments in Africa with the returns on more than half of them being almost double those of FTSE/JSE Africa all share index, according to an April report by Ernst & Young and the African Private Equity & Venture Capital Association.
Last year had the highest number of exits since before the global crisis in 2007, ”attesting to the resilience of Africa at a time of global uncertainty”, the report said.
Mobius, whose Templeton Africa Fund has its largest investments in Nigeria, South Africa and Egypt, said there were also “lots of opportunities” in listed stocks.
There might be “very interesting” prospects in parts of Africa that had so far not attracted many investors, he said.
“Angola is one area that you have to really look at and you also have to keep an eye on Zimbabwe,” Mobius said. “Senegal is also interesting, Sierra Leone too.”
He said Africa’s growing middle class was also attracting wealth and asset managers. “Wherever there’s money, there’s going to be a need for asset” and wealth managers.
UBS, the biggest Swiss bank, said in May it would expand its wealth management services in Africa as economic growth rates surpassed 5 percent boost the demand for banking services. – Bloomberg