PE firms target longer investment period, slash deal size to below $50m
East Africa Venture Capital Association Chairperson Ayisi Makatiani during the annual conference marking the association’s fourth year. PHOTO | DIANA NGILA | NMG
Private Equity (PE) firms seeking to invest in the East African region over the next 12 months have changed their approach in a bid to cushion themselves from a weakening business climate in the region.
And according to a survey by consultancy firm Deloitte, most PE firms are cost cutting or reducing the value of investments. These companies expect to reduce average deal sizes to below $50 million, reduce entry multiples (seek discounts on share purchases) and prolong the lifecycle of those investments to 5-7 years from initial investment to the point of exit.
