Investors Sentiment & Outlook 2025

FOR AVCA MEMBERS ONLY

AVCA's latest member-only report reveals cautious optimism among investors about African private capital in 2025, despite currency and geopolitical concerns. 

The Investors Sentiment & Outlook report offers valuable insights into how Limited Partners (LPs) and General Partners (GPs) view the African private capital landscape for 2025, revealing a measured optimism tempered by global and regional challenges.

For questions or comments on this publication, please contact research@avca.africa.

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Report Overview

The AVCA Investors Sentiment & Outlook 2025 report reveals cautious optimism about African private capital markets, with 56% of LPs and 59% of GPs expressing positive views on investment prospects. However, fundraising sentiment shows greater divergence (48% of LPs vs 29% of GPs optimistic), while exits remain a concern, particularly for LPs.

Currency volatility emerges as the predominant macroeconomic concern for both investor groups, followed by apprehension about the Trump administration's impact on development finance, particularly regarding funding freezes affecting organisations that de-risk investments in Africa.

Despite these challenges, over 90% of LPs plan to maintain or accelerate their capital allocation to Africa in the coming years, buoyed by increasing interest from Middle Eastern and Asian investors alongside growing local pension fund participation.

Market preferences reveal interesting contrasts, with Nigeria ranking as LPs' top opportunity (76%), while GPs favour Kenya and South Africa. The report also highlights technology adoption trends, with 84% of GPs planning to incorporate AI tools.

AVCA Members can access an extended version of the report through the AVCA Platform.

LPs' Sentiment & Outlook 

  • 56% of LPs expressed optimism about investment activity in Africa for 2025, while only 20% were optimistic about exits, signalling cautious optimism overall

  • Currency volatility (76%) and rapidly evolving geopolitical uncertainty (72%) top LPs' macroeconomic concerns

  • Over 90% of LPs plan to maintain or accelerate capital allocation to Africa over the next three years

  • Private Equity and Venture Capital remain dominant in allocation plans (56% combined target), though Infrastructure and Private Debt are gaining share

  • Co-investment emerges as LPs' leading investment opportunity (70%), with Financials (60%) the most attractive sector

  • Nigeria ranks as LPs' most popular market opportunity (76%), though Kenya leads among Africa-based LPs

  • 62% of Africa-based LPs see Africa as more attractive than other emerging markets, compared to 40% of international LPs

GPs' Sentiment & Outlook 

  • 59% of GPs are optimistic about investment activity in 2025, with fundraising (71%) as their top priority 
  • Exchange rate volatility (84%) and the Trump administration's policies (59%) are GPs' primary macroeconomic concerns 
  • Energy (50%), Consumer Goods (49%) and Healthcare (45%) emerge as priority sectors 
  • Kenya and South Africa (both above 65%) identified as top investment destinations 
  • 84% of GPs plan to incorporate AI at the organisational level, with 64% planning implementation at portfolio company level 
  • 52% of GPs believe Private Debt will overtake Private Equity as a profitability driver in the next three years 
  • 54% of GPs believe Africa will be more attractive than other emerging markets in the next five years. 

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