The African Private Equity and Venture Capital Association (AVCA) Limited Partner Survey ranked Kenya as the 2nd most popular country for PE deals in Africa.
The report indicated that foreign investors are drawn to Kenya by the diversified economy, infrastructural developments, and the country’s position as East Africa’s commercial hub.
Kenya’s economy grew by 5.9 percent in 2018 up from 4.9 percent in 2017. In the same period, the country moved up 19 positions in the World Bank’s Ease of doing business report from position 80 to position 61.
Some of the factors that led to a better business environment include regulatory reforms, enhanced access to credit, and structural improvements.
Some of the major PE firms that have invested in the country in the past two years include Ascent Capital, Adenia Partners, LeapFrog Investments, Convergence Partners, Kibo Capital Partners among many others.
The Private Equity funds rarely exceeded $ 50 million (KSh5 billion) per project. International investors mainly focused on consumer goods producers, technology companies, financial services firms and real estate companies.
Even with numerous entries by PE companies into Kenya, the nation witnessed several exits in the five- year period between 2013 and 2018.
Some of the Private Equity companies that sold their investments are, Catalyst Principal Partners, Emerging Capital Partners, Actis, and African Infrastructure Investment Managers. Nearly half of the exits were done through trade buys while the others were done through sales to peer companies.