ALMOST half of the private equity exits in Africa come from SA, according to research by professional services firm EY.
However, this number is set to decline in the long term as investors put money in higher-growth economies elsewhere in Africa.
EY Africa’s private equity leader Graham Stokoe said out of 40 private equity exits in Africa, 19 came from SA. Five were in Kenya, three in Nigeria and the rest in various countries such as Ghana, Uganda and Cote d’ Ivoire.
In 2013, 29 private equity exits were made, making last year one of the best for private equity exits since 2007 with 34 exits, EY said.
SA continued to dominate due to private equity investments made about seven years ago, Mr Stokoe said.
In 2007, companies such as Alexander Forbes and Edcon were delisted from the JSE through private equity buyouts. Alexander Forbes was one of the large private equity exits in SA last year and the move paved the way for the financial services company to relist its ordinary shares on the JSE.
The Alexander Forbes initial public offering was valued at about R3.7bn. It had been delisted in a private-equity buyout worth R8bn in 2007.
A private equity exit that has long been awaited in the South African market is that of retailer Edcon.
Some of last year’s private equity exits had arisen from investments in 2007, including that of parcel distribution company RTT. The value of the exits in Africa had not been disclosed, EY said.
Research done by consulting firm Bain showed earlier in the year private equity exits worldwide had reached a record of $450bn last year as companies looking for growth acquired businesses from private equity companies.
Dorothy Kelso, head of strategy and research at the African Private Equity and Venture Capital Association, said it was "encouraging to note the broadening of exit routes over the past year with increasing options available … to realise value".