World’s biggest private equity firm Blackstone backs away from Africa – The Wall Street Journal

DUBLIN – A few years back, the world's biggest private equity group, Blackstone, announced plans to invest in Africa through a partnership with Joburg- and Dakar-based Black Rhino. At the time, Blackstone was talking about billions of dollars of infrastructure and energy projects that would help kickstart growth on the continent while delivering attractive investment returns. But less than four years later, the firm decided to cut its losses and sell Black Rhino. The move underscores some of the challenges that Western firms encounter when trying to do big deals in Africa, including Chinese competition. China has invested heavily in infrastructure projects in Africa – rather, to be strictly accurate, China has financed such projects with massive, strings-attached loans – and has managed to sew up many of the best opportunities on offer. According to The Wall Street Journal's account of events, Blackstone struggled to find big, attractive deals of the sort it prefers. For Western private equity companies, Africa can be problematic, because it has few of the larger and mid-sized companies PE deals tend to target. Instead, Africa has a handful of very large, state-owned companies, and a huge collection of small and micro-enterprises, many of them informal. It's not a friendly environment for Western firms. But surely that could mean more opportunity for locals. – Felicity Duncan

Blackstone Retreats From Africa Investment Plan

By Simon Clark

Blackstone Group, the world's largest private-equity firm, has pulled back on a plan to invest billions of dollars across Africa, the latest U.S. investor to temper its ambitions on the continent.

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