Private Equity in Nigeria - 1900 Words

Private Equity in Nigeria An Overview of Nigerian Venture Capital and Private Equity Private Equity in Nigeria Page 2 CONTENT EXECUTIVE SUMMARY 3 NIGERIA COUNTRY ANALYSIS 5 TABLES AND EXHIBITS 7 Private Equity in Nigeria Page 3 Executive Summary1 Nigeria is facing an uncertain future as outbreaks of ethnic and religious violence continue to place strains on Africa’s most populated country. With the 2003 elections approaching, the continuing battle amongst incumbent politicians and between competing ethnic and regional groups is likely to intensify. Such an environment will test Nigeria’s fragile democracy, which has never witnessed a hand over from one civilian government to another. The Nigerian government†¦show more content†¦There are currently no buyout firms in Nigeria at this time. Sources of funds About 42% of Nigeria’s independent funds are sourced mainly from US and European government and aid agencies, 17% from local banks, 25% from local pension funds, and 15% from partners and other sources. In Nigeria, institutional investors are reluctant to invest in private equity. A large reason for this is might be lack of familiarity with the private equity asset class. In the short term, Nigeria may see increased commitments from US and European government and aid agencies is most likely, however foreign pension funds are not likely to be significant source of commitments. Investments Private equity investments in CAPE portfolio companies grew from approximately $5 million in 5 companies in 1999 to approximately $12 million in 4 companies in 2000. The average deal size has increased from approximately $1 million to approximately $3 million for new investments reflecting the later-stage of the investments. The fund has made 65% of its investments in telecommunications and information technologies sectors and 35% of its investments in the media and outsourcing sectors. Approximately 60% of the funds investments are expansion and development capital and 40% are venture capital. Exits The fund has not exited any of its investments, but is currently in negotiations for the sale of one of its portfolio companies. Private Equity in Nigeria Confidential Page 5 NigeriaShow MoreRelatedThe Bank Expansion Strategy And Management1354 Words   |  6 PagesBeta is a â€Å"new generation banks† in Nigeria, incorporated in 1990 and commenced operations in 1991 as a private limited liability company. The bank evolved and witnessed a rapid growth to attain the universal banking status in 2001 as a result of a policy of deregulation in the Nigerian banking sector allowing Nigerian banks to operate foreign subsidiaries. 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