WATCH THE VIDEO HERE The African private capital industry has experienced a significant slowdown in deal activity for the second consecutive year, according to a report by the African Private Capital Association (AVCA). Year-to-date (YTD) data shows a total of 287 deals, an 11% drop compared to the 324 deals recorded during the same period in 2023. The report notes that, while 2024 has seen a modest decline in deal volumes, investment values have declined more dramatically, with the first quarter marking the worst-performing start to a year in five years. By the end of Q3 2024, only $1.9 billion had been invested across Africa, representing a staggering 53% decline compared to the same period in 2023. This figure also falls well below the five-year average of $4.2 billion for the first three quarters, marking the lowest YTD deal values since 2020. The report highlights a notable shift in the size of deals taking place. For the first time in five years, smaller deals—those valued below $50 million—have driven the majority of deal activity. “These deals accounted for over two-thirds (66%) of all transactions. Larger deals, particularly those valued above $50 million, saw a sharp contraction of 75% year-on-year (YoY). “Deals within the $50-99 million range were especially impacted, plunging by 92%, with no deals exceeding $250 million reported. “This shift reflects a strategic pivot among investors, who are focusing on smaller, more manageable investments to mitigate risk and optimize returns in an uncertain economic environment,” the report stated. According to the report, the pullback from large capital commitments has had a significant impact on venture capital, private equity, and infrastructure investments. The report revealed that private equity, on the other hand, showed a 28% YoY increase in deal volume, driven by more buyouts and growth capital deals. Yet, this increase did not translate into higher investment values. Only $0.4 billion was deployed across private equity deals YTD, marking a 66% YoY decline and the lowest investment values in seven years. However, in contrast to other asset classes, private debt has emerged as a relatively bright spot in the market.
African Private Capital activity declines by 11% YTD amid global market challenges – Report
