Rédaction Africa Links 24 with Kenyans.co.ke
Published on 2024-02-21 09:41:18
Wealthy investors in Kenya are increasingly turning to the private equity sector, as revealed by the latest Knight Frank report – Kenya Market Update. The report, which covered the second half of 2023, indicated a noticeable surge in the appetite for private equity investments over the last five years. In addition to private equity, the report highlighted four other sectors that are attracting significant investments: health, data centers, cold storage systems, and purpose-built housing.
The report stated, “In the last five years, there was a high appetite for investments in alternative sectors in Kenya, with private equity firms ruling this market.” This trend is reflected in the increasing foreign direct investment in sectors such as health, data centers, cold storage systems, and purpose-built housing. The report emphasized the significant influx of investments in these sectors and the competition amongst investors to capitalize on market opportunities.
In the health sector, notable developments include plans for a 152-bed hospital by Columbia Africa in Nairobi, along with the construction of another hospital with a capacity of 150 beds within the capital’s metropolis. The report also highlighted anticipated changes in public healthcare provision in 2024 following the introduction of new legal and institutional healthcare frameworks through various Acts, including the Primary Health Care Act, 2023, Digital Health Act, 2023, Facility Improvement Financing Act, 2023, and Social Health Insurance Act, 2023.
The report further indicated a shifting focus of wealthy investors towards these sectors, away from the real estate landscape, which has become increasingly volatile. According to a real estate agent interviewed by Kenyans.co.ke, investors have diverted their funds to bonds due to rising house prices, which has diminished their purchasing power.
Private equity firms, which consolidate investment funds on behalf of investors to invest in companies before eventually selling them at a profit, have been experiencing significant growth in Kenya. The East Africa Venture Capital Association’s (EAVCA) report from September last year revealed that Kenya’s private equity and venture capital sector accounted for the largest percentage of deals made in East Africa over the last decade. Kenya led with 69% of the deals, followed by Uganda at 12%, and Tanzania and Ethiopia with 6% each. The report also noted that private equity firms in Kenya recorded Ksh1.3 trillion in deals during the period.
Overall, the report underlines the growing prominence of private equity and alternative sectors in the investment landscape in Kenya. With increasing interest from wealthy investors and a shift away from traditional real estate investment, the private equity sector and other alternative sectors are expected to play a significant role in driving economic growth and development in the country.
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