Kenya tops EA with Sh520b private equity deals

Business Daily Kenya:  Kenya has continued to attract the lion’s share, 50 per cent, of total the Private Equity (PE) and Venture Capital i...

Business Daily Kenya: 

Payments. Photo/Courtesy

Kenya has continued to attract the lion’s share, 50 per cent, of total the Private Equity (PE) and Venture Capital in East Africa for the last nine years, a study reveals.

According to KPMG and East Africa Venture Capital Association (EAVCA) survey, Kenya has continued to get approximately 50 per cent of the 115 Private Equity (PE) backed deals which amounted to Sh519.59 billion.

Among companies that have received PE in the country include Safaricom at Sh268.84 billion, I&M Bank at Sh34.6 billion, Kenya Breweries Sh23.2 billion, UAP Holdings Sh16.1 billion and CMC Holdings Sh13.1 billion deal during the first half of 2017.

According to the survey the volume of deals in Kenya increased significantly to 23 in 2016, after reaching a low of five in 2012. The study says that the lull in 2012 can only be attributed to the existing political environment at the time.

KPMG Head of Deal Advisory, East Africa Sheel Gill said Kenya is emerging as a favourite investment destination for funds raised through PE and venture capital funds.

“The financial services sector in Kenya has witnessed the most deals at 42 followed by energy and natural resources at 16 and fast moving consumer good (FMCG) at 12,” she said.

Eva Wariga, executive director of EAVCA, says the average number of deals reported per year increased to 18 per cent for the period 2015 to 2016 compared to nine per cent in 2014.

“A 2015 amendment to the Retirement Benefits Authority (RBA) of Kenya’s regulation saw an allocation of up to 10 per cent of a fund’s assets under management allowed for direct investment by the country’s pension funds into private equity as a distinct asset class,” she said.

A total of 28 private equity and venture capital funds participated in this year’s survey compared to 18 in the first survey done (2009-2014).

“The positive economic story recorded in the region has a direct correlation to the growth of the private equity and venture capital sector during the period 2015 and 2016,” she said.

Gill disclosed the total value of PE-backed deals in East Africa during 2015-2016 is estimated at $600 million (Sh62.0 billion) bringing the total value to $1.4 billion (Sh144.69 billion) from 2007 to 2016.

The post Kenya tops EA with Sh520b private equity deals appeared first on Mediamax Network Limited.

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