Private equity's growing play: Africa

A worker scans a product in Lagos.
Pius Utomi Ekpei | AFP | Getty Images

Africa's rapid economic growth has lured top American private equity firms to invest in recent years, including the Carlyle Group, Blackstone, KKR and PineBridge Investments. While the continent represents a sliver of their overall investments, there's likely much more to come.

"We're not even in Chapter One of private equity in Africa. It's more like the prelude," David Marchick, global head of external affairs at Carlyle, said during a panel discussion Monday night in New York. "We hope all the major firms will be there in five to 10 years."

That optimism was not diminished by the recent terror attacks in Nairobi that killed dozens; Marchick and others at the Africa-focused event did not bring up the shootings.

Carlyle launched a sub-Saharan Africa fund in 2012 based out of Johannesburg and Lagos, Nigeria. The fund, which focuses on buyouts and minority investments, partnered with The Pembani Remgro Infrastructure Fund and Standard Chartered Private Equity in November 2012 to invest $210 million in Export Trading Group, a Benin-based agricultural supply chain business.

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African countries have average economic growth that Americans and others would love. The International Monetary Fund projects gross domestic product growth of 5.1 percent in 2013 and 5.9 percent in 2014. That compares to global averages of 3.1 percent and 3.8 percent, respectively.

Blackstone has been in Africa for nine years, focusing on large energy project development—and more is planned.

"Being there early in many of these countries with transformative projects ... will then position us well to try and understand the economies on a go forward basis," said Sean Klimczak, senior managing director in Blackstone's PE unit, during the same panel hosted by PricewaterhouseCoopers and the Foreign Policy Association.