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Chart of the week: African fundraising slowdown

As private equity firms hold onto Africa-focused investments for longer, the pace of fundraising takes a hit.

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Private equity exits in Africa have hit a nine-year high, according to a survey by the African Private Equity Association and EY.

Their study also found holding periods have topped six years amid macroeconomic uncertainty.

PEI’s Research & Analytics team have delved into the fundraising figures to discover whether this has meant that firms are spending longer at the capital raising stage.

In 2016 to date, the average time spent on the road by vehicles targeting Africa is 21 months, six months longer than in 2010.

Although rapid urbanisation and the rise of the middle class mean the region remains attractive to investors, many still approach the market with caution. The lack of large pan-African companies and a commodity-induced slowdown throughout the continent have left some wondering whether the opportunities available are big enough to generate meaningful returns.

Despite these reservations, which may explain the lengthening fundraising period, $3.8 billion was gathered for closed-ended private equity vehicles focused on Africa in 2015, the largest amount raised since 2010. So far this year, $1.25 billion has been collected from the close of six vehicles.