Search funds are not ready to build Africa’s PE pipeline

A lot has been said about how African private equity (PE) needs more exits. Even more has been said about how recent macroeconomic conditions have affected African PE performance, and more positively, how that could change soon. But what does it profit a General Partner (GP) if they successfully raise a healthy fund amid good economic conditions but cannot find a company that meets the fund's criteria? This is a question that Africa GPs are increasingly asking, and the data backs it up: in the 2021 AVCA Private Equity Industry survey, 26% of GPs cited limited investable opportunities as a barrier; by the 2023 survey, that had gone up to 38%. GP behaviour tells a similar story, with large PE firms crossing over into venture capital to capture returns and to cultivate future buyout candidates. Whether or not sourcing has become harder, we know for sure that it is always