Over the past year or so, we’ve all become familiar with a whole host of terms we knew nothing about at the start of 2020. ‘Lockdown’, ‘rate of transmission’ and ‘social distancing’ all entered our collective vocabularies. At the same time, we had to get used to new ways of working and doing business.
Adjusting to new ways of operating is as true for private equity (PE) as it is for any other sphere of business. Initially, it looked like the economic devastation wrought by Covid-19 would hit African PE activity particularly hard.
In the first half of 2020, the value of private equity deals on the continent was on pace for a 63% drop compared with 2019. The final figure may have been even worse, underlining how disruptive the pandemic has been.
Even as the mass rollout of vaccines around the globe brings a glimmer of hope that life may return to some semblance of normal, it’s likely that the conditions of 2020 will be with us for some time to come. It’s therefore imperative that private equity firms, their investors, and the firms they fund use the lessons of 2020 to inform their approach going forward.