Enitan Obasanjo-Adeleye, AVCA, Private Equity Investors

In an interview, Nairametrics had the pleasure of engaging Enitan Obasanjo-Adeleye Director, Head of Research at the African Private Equity and Venture Capital Association (AVCA) on several issues about private equity and investing in Nigeria.


Are there any peculiarities for private equity investing in Nigeria compared to other parts of Africa?

Nigeria is a particularly attractive market for private equity investors because of its potential for scale and the size of the available opportunities in the country, both of which are underpinned by its demographic profile. Due to the large supply-demand gaps in many sectors, from infrastructure through to education and healthcare, opportunities to generate attractive returns can be found despite macroeconomic challenges. Increasingly, Nigeria is seeing investments in companies looking to employ technology to address problems in innovative ways.

Nigeria is approaching elections. Has this dampened enthusiasm for investing in the country?

Our data does not yet reflect a dampening enthusiasm for investing in Nigeria. The country represented 18% of total African PE deal volume for the first half of 2018, compared with 15% for the first half of 2017, and 16% for the second half of 2017. This is against a backdrop of slightly lower deal volumes on the continent. However, in the past, we have sometimes seen activity slowing down the closer we get to an election period. The impact of political events may be reflected more in the data for the second half of 2018, or the first half of 2019.

Do investors face any difficulties in exiting private equity investments in the country?

Exits through trade buyers constituted 50% of exits in Nigeria between 2007 and 2017, compared to 43% of exits in Africa overall. The second main exit route in Nigeria has been through MBOs or private sales (18%), whilst the capital markets have facilitated 15% of exits in Nigeria. These exits, however, have generally fallen in the earlier years of the last decade; Nigeria’s capital markets have not provided the depth and buoyancy required to be an attractive exit option in recent years. Exits to PE and other financial buyers have been lower in Nigeria compared with other markets (12% in Nigeria compared with 20% in Africa overall). This indicates that exit options have been somewhat limited in Nigeria, but we are seeing an increasing exploration of the capital markets as exit routes in Africa overall.

What sectors of the Nigerian economy are investors particularly keen on?

By volume, the largest share of PE deals in Nigeria between 2012 and H1 2018 has been in Financials (21%), Real Estate (21%) and Consumer Discretionary (13%). Examples of these include Leapfrog’s investment in ARM Pension Managers in 2018, Actis’s Investment in Jabi Lake Mall in Abuja in 2014, and Verod Capital Management’s transaction in Greensprings Educational Services Ltd in 2017.

Business owners tend to be wary when it comes to dealing with PE investors. What advice would you give any business owner desirous of selling a stake to a PE investor?

Beyond growth capital, private equity provides invaluable strategic and operational advice, access to networks and supply chains that can drive the growth of businesses and give them an edge in difficult or competitive markets. Private equity investors are looking to partner with business owners, with interests that are well aligned with those of the entrepreneurs, and often seek minority holdings. The focus on an exit strategy ensures an appropriate focus on value creation, with ESG considerations being a core part of that. In essence, African private equity seeks to provide capital and expertise that can help businesses grow sustainably, taking local companies into new markets and making them more attractive for strategic buyers, such as multinational companies, or preparing them for listing on the capital markets.


  1. An enlightening post. As usual, always top notch interviews from Nairametrics. I must commend the team. Kudos!

    Feedback: it will be helpful, going forward, to define terms abbreviated terms like PE, MBOs, ESG etc.


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