Private capital inflow rises 12% globally
By Jeph Ajobaju, Chief Copy Editor
Nigeria received $1.1 billion private capital inflow in 2021 as global assets under management (AuM) rose 12 per cent to $112 trillion, far above the 20-year growth average of 7 per cent.
A new report released by Boston Consulting Group (BCG) said Nigeria tops the list of countries with remarkable private capital inflows, account for about 145 venture capital deals in 2021.
“With $100 trillion to $150 trillion in capital deployment required to reach net-zero goals by 2050, demand for sustainable investments represents an opportunity that will dominate the sector in both the short and long term.
“Roughly $20 trillion to $30 trillion is expected in bond and equity allocations for asset managers, much of it frontloaded over the next few years as more investments flow into climate-transition projects,” BCG said.
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Growth of alternative assets
The report anticipates revenue from alternative assets such as private equity, hedge funds, and real estate assets will grow to more than half of the global revenue in the next five years.
“Africa’s economy continues to be attractive to private capital investors who are seeking huge returns and Nigeria tops the list of countries that had remarkable private capital inflow in 2021,” said Stefano Niavas, Partner and Managing Director in BCG Nigeria, per Vanguard.
“A larger share of these funds was invested into venture capital assets followed by infrastructure and then private equity.
“About 145 Venture Capital deals were reported in Nigeria in 2021, with a total value of $1.1 billion, according to African Private Equity & Venture Capital Association (AVCA).”
Fintech boom
Investors in 107 deals pumped $678 million into Nigerian tech startups between January and April 2022 (4M 2022), a 137 per cent jump above $286 million in 4M 2021.
Africa Tech and Fintech report by Renaissance Capital shows that Nigeria accounted for 31 per cent of the total $2.2 billion raised by African techies in 4M 2022.
Nigeria came second after Kenya which topped the league with $750 million.
However, Renaissance Capital has noted that global venture funding is slowing down, and although the African tech scene saw a vibrant first quarter, it too began to witness a decrease in funding in April.
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