Southern Africa’s private equity (PE) industry is entering a phase of cautious optimism, with both firms and investors showing renewed confidence despite fundraising pressures and geopolitical concerns, according to the South African Venture Capital and Private Equity Association (SAVCA) Private Equity Industry Survey 2025.
“After years of navigating economic headwinds, political uncertainty, and shifting investor sentiment this latest survey paints a picture of an industry that is turning the page,” says Nicola Gubb, SAVCA’s interim executive director. “Firms and investors alike are refocusing on dealmaking, exploring new strategies, and reaffirming their commitment to long-term transformation.”
Dealmaking gathers momentum despite fundraising slowdown
The survey, which covers the 2024 PE investment period, reveals a significant acceleration in investment activity and strong portfolio performance. This is despite funds raised in 2024 totalling R8,4-billion – a steep decline from the record R28,1-billion in 2023.
“Nevertheless, 2024 emerged as the highest dealmaking year by value and second largest by volume since 2018 – with capital deployment reaching R26,6-billion across 228 deals compared to R15,7-billion across 146 deals the year before,” says Gubb.
Infrastructure led the way, accounting for 27% of investment value, followed by energy (13%) and IT (12%).
Portfolio performance also demonstrated resilience. Two-thirds (66%) of portfolio companies achieved revenue growth above inflation from 2022 to 2024 with the IT sector leading at 85%, followed by healthcare at 67%. Over 40% of portfolio companies also reported employment growth above 5% during the same period, showing private equity’s tangible role in job creation.
While exit proceeds declined to R17,1-billion in 2024 from R21,3-billion in 2023, the number of exits increased from 45 in 2023 to 52 in 2024. An encouraging element for exits was the return of disposals through the public markets – with one exit through the sale of public shares and one through an IPO listing.
“Exits are gaining momentum and the increase in activity is a positive sign,” says Gubb. “The industry is also demonstrating prudent deployment of capital with dry powder being actively invested. This is a clear signal of confidence in the opportunities available.”
Private credit gains traction as an alternative strategy
In response to the region’s evolving capital needs, local PE firms are increasingly viewing private credit as an attractive diversification strategy. The survey found that 86% of firms are considering or actively pursuing private credit, up sharply from 50% in the previous year.
“While it still represents a smaller share of funds under management, this surge in interest highlights firms’ efforts to broaden their offerings in line with allocator preferences for real assets, infrastructure and credit,” notes Gubb.
ESG and transformation remain priorities
Environmental, social and governance (ESG) considerations have become central to investment decisions and value creation. In 2024, 64% of southern African PE firms employed dedicated ESG professionals – with 63% of firms reporting a positive impact of ESG strategies on exit proceeds. “We’re seeing that the emphasis is shifting from compliance to impact,” adds Gubb.
Transformation indicators have also showed continued progress. The proportion of firms with more than 50% black ownership rose to 61% (from 59% in 2023), while black female ownership increased to 21% from 16%. Firms with over 50% black management grew to 72% (from 62%), and portfolio companies with majority black management rose to 57% (from 50%).
While women’s representation within firms slipped – with 43% of PE firms reporting boards with over 30% female members, down from 49% in 2023 – portfolio companies are showing stronger diversity in executive leadership, indicating early signs of deeper transformation.
A shift towards more purposeful capital deployment
For the first time, the survey incorporated direct insights from allocators, bringing valuable first-hand perspectives on their priorities, concerns, and aspirations.
“While allocators remain more measured in their short-term expectations, their growing interest in sectors such as healthcare and infrastructure signals a shift toward more purposeful capital deployment – one that aligns closely with regional development goals and the long-term vision of private equity in southern Africa,” says Gubb.
Looking ahead, 50% of southern African PE firms expect elevated dealmaking activity in 2025, with 60% anticipating further strengthening in 2026. Adding to this cautious optimism, 66% of allocators expect an increase in exits in 2025.
“The survey confirmed that 33% of allocators expect fundraising to increase significantly, while 37% of firms expect fundraising to increase somewhat,” says Graham Stokoe, EY Africa Private Capital leader, who led the EY team that conducted the research. “While PE fundraising was notably constrained in 2024, the outlook expressed by firms, and especially allocators, is positive. This is a positive indicator for increased investment into PE going forward, and importantly, for the wider impact this can have in supporting high-growth businesses and driving economic development.”
Gubb adds: “The industry is indeed entering a new phase – more agile, more accountable, and more aligned with regional goals.
“The road ahead is not without complexity, but the energy, resilience, and innovation already taking shape suggest that southern African PE is ready to meet the moment,” she says.