The continent’s private equity funds increased their capital injections in the first half of this year, amid record exits as international equity investors accelerated their withdrawal from deals with African companies.

Of the $1.9 billion in private equity invested in the continent’s firms by various players, about $475 million – or 25 percent – came from local financiers, including development banks, pension funds, insurers, and individual investors, data from the Africa Venture Capital Association (AVCA) shows.

This marks a rise from last year’s $342 million, which accounted for just 18 percent of the total $1.9 billion invested over the same period – signalling growing support for African companies from within the continent.“The investor base continued to shift as observed in 2024, with local LPs (limited partners) increasing their share to 25 percent in H1 2025, up from 18 percent in H1 2024,” noted the association in its half-year private equity activity in Africa report.“African pension funds and sovereign wealth funds stepped up their allocations, both committing nearly $100 million, with pension fund allocations doubling from the previous year.”Local Development Finance Institutions (DFIs) such as the African Development Bank (AfDB), Trade and Development Bank (TDB), and the African Export-Import Bank (Afreximbank) continued to dominate these deals, jointly accounting for 67 percent of the funds invested by African entities, up from 57 percent last year.

Pension funds raised their share of invested equity from last year’s seven percent to nine percent, while sovereign wealth funds stepped up almost 10-fold from just one percent last year to match pension companies at nine percent, or $42.75 million.

Meanwhile, exits from companies – which occurs when previous investors decide to sell their equity after a certain period of investment – rose to hit a record high in six months even as fund managers accelerated exits to mitigate risks.

In the six months to June, 29 exits from African companies were recorded, a seven percent year on year increase from 27 in 2024.

The majority of the exits were in the financial sector, which also led in the number of private equity deals during the period, with 27 percent of the deals going to the industry.

Regionally, Southern Africa led with the number of private capital deals with 55 deals, followed by the East African region with 42 deals. North and West Africa had 41 and 40 respectively, while Central Africa had none.

Southern Africa also led in deal value with $800 million, followed by Eastern Africa with $300 million, North Africa with $200 million, and West Africa with $100 million, while the remainder went to foreign-based companies operating in Africa.“East Africa’s deal activity moderated slightly while deal value declined 7 percent YoY to $344 million, cushioned by a large transaction in the energy sector that accounted for 52 percent of total capital deployed,” noted AVCA.

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