African investments are breaking records, and exits are starting to happen. The proliferation of VC interest for the continent's tech startups has led to the creation of series of Funds.
To tap into the potential of homegrown promising ventures, limited partners (LPs) are also starting to invest in the region's early-stage companies, indirectly.
The African Private Equity and Venture Capital Association's 2016 Annual Limited Partner Survey said that only a third of LPs (30 percent) expect their African PE returns to exceed 2.5x.
The same report said 65 percent of LPs investing in Africa say that investing via PE in the continent will be attractive over the next 10 years (2016 to 2026).
In March, Kenya-based Savannah Fund launched a USD 25 Mn to seed-fund African startups while Japan's Uncovered Fund unveiled a USD 15 Mn Fund to back early-stage African ventures. These launches, however, are but the recent and few of the many created in the last few years.
To peek into the African LP investment space, WeeTracker had an exclusive interview with Andrea Böhmert, Partner at Knife Capital—a Cape Town-based venture capital firm.
In February, Knife Capital secured USD 10 Mn from Mineworkers Investment Company (MIC), a South Africa-based investment firm—a typical case of an LP tapping Africa via a VC.
Are Limited Partner (LP) investments really scarce in Africa compared to elsewhere?
Yes, in comparison to elsewhere, LPs are scarce.