Carlyle Aiming For New Sub-Saharan Investments Early Next Year

Dec 1 2015 | 7:01pm ET

Global alternative asset manager Carlyle Group has said it may make new investments into sub-Saharan Africa early next year.

The company believes the region will grow faster than all other areas except India and China in 2016, according to a Bloomberg article, and is thus studying companies in Nigeria, South Africa, Mozambique, Zambia and Kenya for possible investment. The fund is also considering some businesses whose activities span the continent.

The IMF estimates the sub-Saharan economy will expand 4.3% next year, versus 6.4% in emerging and developing Asian nations, which Carlyle expects will combine with greater currency stability to drive increased private equity activity. 

Carlyle's Sub-Saharan Africa Fund manages some $698 million and has invested in four companies to date. Closed in 2014, it far surpassed its fundraising target of $500 million when first launched in 2011. Carlyle is looking at the banking, consumer goods, manufacturing and data processing sectors for up to five possible investments, according to the report. 

International private equity has become the fastest-growing source of investment in the sub-Saharan region, rising five-fold since 2008 to reach approximately $12 billion, according to Reuters. However, a significant portion of this capital flow has gone into energy and commodity-related businesses, raising concerns that the meltdown in commodity prices this year may delay or scuttle projects. 

In addition to Carlyle, Blackstone, Denham, Helios and Abraaj are among the active private equity investors in the region. Abraaj, for instance, has deployed around $3 billion into the region from three dedicated sub-Saharan Africa private equity funds. 

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