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Private equity: Private equity investors look to Africa

Big potential seen in mobile communications and financial services.

A growing number of private equity firms are popping up in Africa, and are not just focusing on South Africa, as has traditionally been the case. Cynthia Hostetler, vice-president for investment funds for the US Overseas Private Investment Corporation, says that although private equity in Africa is still nascent compared with the US and western Europe, more and more pan-African private equity firms are appearing. Opic has made board commitments of more than $500 million over the past four years, and plans to make additional investments in private equity in Africa through two new initiatives. "We will be investing alongside others, and our combined total amount invested in African private equity through these initiatives will be around $1 billion," says Hostetler.

She attributes the growing interest in private equity in Africa to the successful exits of the past two years. "There is also a feeling that there has been additional political stability in Africa which has interested investors looking for yield and for diversification. I think it is prudent for global institutional investors to look at allocations for Africa that would include public and private equity."

One of the most recent successful exit stories is that of pan-African mobile phone company, Celtel.

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