Nicola Gubb | Interim Executive Director | Southern African Venture Capital and Private Equity Association (SAVCA) | mail me |
Southern Africa’s Private Equity (PE) industry remains cautiously optimistic. The outlook is underpinned by deal-making momentum, resilient portfolio performance and a shift toward more diversified investment strategies.
These evolving dynamics were unpacked at our recent PE Connect event. Industry leaders explored the key drivers and pressures shaping Southern Africa’s private equity market. They also examined how the sector is positioning itself for sustainable growth following the release of the 2025 PE Industry Survey.
The economic landscape
Providing a macroeconomic lens, Annabel Bishop, Chief Economist at Investec, noted the complexity of the global environment. Tariffs are all up in the air, creating uncertainty for the global economy. US interest rate hikes and currency fluctuations are influencing risk appetite and investment decisions,” she explained.
Domestically, Bishop highlighted structural constraints such as port inefficiencies and high government borrowing. However, she also pointed out that fixed investment provides a cushion. “Inflation in South Africa has dropped like many emerging economies,” she said. “A weak economy has pushed us into a weak inflation environment.”
As the Reserve Bank lowered its forecasts from 4% to 3%, Bishop observed that the rand only moved against dollar weakness and not against the euro. Overall, she described it as a volatile environment. Yet, she believes there are opportunities for disciplined investors who focus on strategy and risk management within Southern Africa’s private equity market.
Views of the PE sector
Anne Keppler, Regional Director at DEG Invest, shared her perspective as a limited partner. “When looking at future allocations, we focus on performance-driven numbers but also on liquidity. We stay with many businesses and often question how we are still realising exits. And we watch closely how our funds get recycled, because we don’t always see the money come back,” she said.
Kudakwashe Gumbie, Senior Investment Officer at Verdant Capital, reflected on how historical performance informs behaviour. “It starts with looking historically at what happened in the last four to five years. COVID-19 had a trickle-down effect. From an economic data point of view, the globe is not in a terrible state. But when things are uncertain, you go to safer investments,” he explained.
Infrastructure and private credit are increasingly central to strategy, noted Kgabang Moloedi, Assistant Portfolio Manager of Private Markets at the EPPF. “From a pension fund perspective, our long-dated liabilities align well with the stable, predictable return profile of infrastructure, which is why we are increasing our exposure. On the private credit side, we established it as a standalone asset class, as it provides valuable self-liquidity in an environment where private equity exits can take longer,” she said.
She also highlighted that EPPF sees the value in smaller funds. Private equity can offer growth opportunities that complement the resilience of credit and infrastructure.
George Odo, Senior Partner of AfricInvest East and Southern Africa, discussed the evolution of the exit strategy. “We used to buy cheap and sell high, but the markets have landed differently, and the good old days are over. Now it’s about value creation – that’s how we grow. You have to be disciplined when buying assets and think carefully about how to protect and create value during exits. We’re not doing full exits like before, and we’re more measured about the upside and value we leave on the table,” he said.
Where deal-making is headed
According to our 2025 PE Industry Survey, 50% of firms expect elevated deal-making in 2025. Additionally, 60% anticipate further growth in 2026. More than a third of allocators foresee a rise in fundraising, signalling renewed capital inflows into Southern Africa’s private equity market.
While global investors are pulling back and local conditions remain complex, managers are finding creative ways to adapt. They remain bullish on long-term opportunities. Rising demand for healthcare solutions and a growing technology ecosystem stood out as key investment sectors. Education and healthcare technology, in particular, offer sustainable returns.
The region is also witnessing a strong push toward renewable energy. “There’s a lot of appetite for energy infrastructure, meaning there is momentum and opportunity,” said Monya Bassingthwaighte, Investment Director at Inspired Evolution Investment Management. She added that clean energy and its value chains are very much part of the current strategy. However, Gumbie pointed out that African infrastructure and energy still lack sufficient investment overall. Greater capital inflows could benefit the region substantially.
What is keeping PE managers up at night
Another recurring theme was the difficulty of finding and retaining top-tier management teams. Survey data suggested that many deals underperform not because of limited capital, but because of execution gaps. This reality highlights the importance of fund managers acting as talent developers, not only capital allocators.
Regulatory roadblocks also present challenges. They slow down cross-border activity through regulatory friction and legal costs. At the same time, there are pressures to execute effectively on ESG-linked opportunities. Harmonisation efforts within the region could improve deal flow, although most agreed this remains a medium- to long-term aspiration.
The road ahead
The next decade for Southern Africa’s private equity market will be about maturing the ecosystem. Those who can stay the course will reap the full benefits.
Looking at what we’ve achieved and how we can chart the course ahead reflects both the challenges and opportunities in the sector, as well as the resilience and creativity that make Southern African private equity what it is today.