Mark Mobius, who oversees $53 billion in emerging markets, said he’s considering private equity investments as a way of tapping growth in Africa.
“We are looking at the private equity side of things in Africa,” Mobius, executive chairman of Templeton Emerging Markets Group, said in a phone interview from Moscow on June 28. Templeton has about $1 billion invested in Africa.
The potential generated by the continent’s 1 billion consumers has created a $25 billion private-equity industry, said Michelle Essome, chief executive officer of the London-based African Venture Capital Association. Actis Capital LLP and Ethos Private Equity Ltd. are among those hunting for private-equity opportunities in Africa to supplement the investment options provided by growing debt and equity markets.
Between 2007 and 2012 private equity fund managers exited 118 investments in Africa with the returns on more than half of them being almost double those of Johannesburg’s FTSE/JSE Africa All Share Index, according to an April report by Ernst & Young LLP and the African Private Equity & Venture Capital Association. Last year had the highest number of exits since before the global crisis in 2007, “attesting to the resilience of Africa at a time of global uncertainty,” the report said.
Mobius, 76, whose Templeton Africa Fund has its largest investments in Nigeria, South Africa and Egypt, said there are also “lots of opportunities” in listed stocks.
There may be “very interesting” prospects in parts of Africa that have so far not attracted many investors, he said.
“Angola is one area that you have to really look at and you also have to keep an eye on Zimbabwe,” Mobius said. “Senegal is also interesting, Sierra Leone too.”
Africa’s growing middle class is also attracting wealth and asset managers, said Mobius.
“Wherever there’s money, there’s going to be a need for asset” and wealth managers, he said.
UBS AG (UBSN), the biggest Swiss bank, said in May it will expand its wealth-management services in Africa as economic growth rates surpassing 5 percent boost demand for banking services.
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