Perceived barriers to investing in African private equity

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Perceived biggest challenges to investing in private equity in Africa

By investor group

By location

By location excl. DFIs

By location excl. FoFs

By location excl. DFIs and FoFs

Respondents believed that the biggest challenges to investing in private equity anywhere in the world were the lack of liquidity, long time horizons and perceived high fees.

When asked about the specific challenges facing African private equity, the relative youth of the African private equity industry was the main concern, resulting in relatively few established general partners and a perceived weak exit environment. The perception that Africa has political risk is present, and was also cited as the third-biggest challenge. African limited partners were, however, less concerned with political risk than non-African limited partners.

Concerns in some quarters that additional capital flowing into African private equity was causing increased competition and high entry valuations were reflected by a small minority of limited partners surveyed.

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