SA's private equity sector last year shrugged off the global economic uncertainty with funds under management topping a record R115bn, including uncommitted funds of more than R34bn, KPMG said yesterday.
While the sector attracted investors seeking exposure to emerging markets, an executive at KPMG said other sub-Saharan African markets besides SA were drawing global private equity funds to regional opportunities.
Ratings agency Moody's said yesterday the region's economy was expected to grow 5,4% this year from 5% last year, buoyed by strong domestic economic activity and rising commodity prices.
Warren Watkins, the clients and sectors head in the private equity unit at KPMG in SA said the private equity sector in SA was "ticking along" despite the global economic uncertainty.
Quoting the latest annual Venture Capital and Private Equity Industry Performance Survey of SA, conducted by KPMG and the Southern African Venture Capital Association, he said the value of private equity investments rose 32,2% from R11,8bn in 2010 to last year's R15,6bn.
The number of investments fell 26% from 547 to 521 over the period. Last year, for the first time in the history of the survey, follow-on deals (R8,6bn) exceeded new investments (R7,0bn).
The survey showed overall average deal size rose from R21,6m in 2010 to R29,9m last year. The average deal size for n ew investments grew from R17,3m to R19,8m, while follow-on investments' average deal size rose from R29,8m to R51,5m.
Mr Watkins said the question was where the uncommitted R34bn would be invested, although indications were that half was earmarked for projects outside SA. "When we started the survey 12 years ago, the funds were solely focused on SA and that percentage (targeted for SA and the region) is now 50-50."