For years, Africa’s business forums have echoed with the same refrain – the call for “global capital.” Another key to scaling investment opportunities on the continent is to recycle the capital that’s already been committed through secondary sales.
Secondary funds, which buy existing company or fund stakes, could finally open the channel for billions of dollars in institutional capital from the US, Europe and Asia to flow into African mid-market companies.
In my work as the co-founder of Sango Capital, a multi-strategy, Africa-focused PE fund, I have witnessed the rise in these transactions and participated in them as both buyer and seller. Their potential for unlocking capital is significant.
Recycling capital
African private equity funds have raised about $30 billion in the past decade, according to AVCA data. Much of this capital remains tied up in aging portfolios as managers contend with slower exits and currency volatility. Further, many African PE firms count DFI capital as LPs. DFIs are often constrained by their mandate against participating in secondary transactions and are hesitant to sell for NAV discounts. Most exits in Africa have been driven by strategic acquirers and M&A. While this is similar to the US, such transactions take longer to close in Africa.
This exit backlog has direct consequences. African PE managers face pressure from limited partners and struggle to raise new funds. Promising businesses remain stuck in portfolios for too long and outgrow the abilities or capital pools of their PE investors. The average holding period for African PE investments is now 6.4 years, while North American and Asian benchmarks are below 6. Quick exits (under five years) have dropped from 33% in the early 2000s to just 12% in recent years, reflecting rising friction in capital recycling.
Fresh and differentiated capital is needed in African private equity. In 2024, total deal value declined 7% year-on-year to $5.5 billion, even as the number of deals increased 8 percent to 485. This signals that managers are executing more, but smaller, transactions while LP fundraising momentum slows. Although deal volumes remain resilient, there is still room for differentiated capital to flow into secondary private equity, helping funds nearing the end of their life cycles manage assets they haven’t exited.
For global secondary managers, this is an opening to extend proven models – from continuation funds to portfolio acquisitions – into African markets that are rich in quality but constrained by low liquidity. A mature secondary market would not only recycle capital more efficiently but also strengthen Africa’s private-equity ecosystem – something both local fund managers and global allocators have a stake in building.
Attracting new investors
Secondaries-focused vehicles offer institutional investors a differentiated entry point into African private markets, combining earlier and more predictable liquidity than traditional PE funds, though still with the long-term horizon suited to pension capital. They can achieve instant diversification across countries, sectors, strategies, fund vintages and risk profiles, all while accessing assets at potentially discounted valuations and avoiding origination risk. African secondary exits remain underdeveloped: Only 32% of African PE exits between 2000 and 2023 were sales to other private equity firms, compared to 45% globally.
Interest in secondaries as a liquidity solution has grown steadily as African PE fund vintages from the 2010 to 2016 wave approach or exceed their natural holding periods. This correlation is structural – maturing funds need solutions to fulfill their mandates and return capital and global funds often seek to spin out investments to refine investment focus and generate liquidity.
In 2013, Barclays Africa sold off its 73% LP interest in Absa Capital Private Equity Fund I to a syndicate led by HarbourVest and Coller Capital, with the team spinning out as Rockwood Private Equity; and in 2019, Standard Chartered sold a 35-asset emerging markets portfolio into a continuation vehicle backed by ICG Strategic Equity, with the team spinning out as Affirma Capital. More recently, in the markets that have concentrated the bulk of primary deal activity – South Africa, Nigeria, Kenya, Morocco, and Côte d’Ivoire – secondary transactions are becoming more common.
Sango Capital has executed LP consolidation transactions across two West African PE funds managed by Synergy Capital Managers with the latest transaction concluding in 2025. That same year, IBlueEarth completed a GP-led secondary, acquiring a stake in Moniepoint from BII and existing employee shareholders, returning capital to incumbent African LPs while introducing new capital.
In 2024, exit values grew grew 47% year-on-year, led by secondary and trade sales, bringing Africa’s average exit-to-investment ratio over the past few years to approximately 0.3x – still below the 0.4x to 0.6x range of mature markets, but the strongest since 2020.
Global secondary capital may be uniquely suited to scale this opportunity. Secondary funds can absorb stranded but well-managed assets, offer flexible structuring, and generate attractive unlevered returns. They also allow investors to tailor portfolio exposure across vintages, strategies, and geographies from the outset.
Firms like Blackstone Strategic Partners, Lexington Partners, Ardian, and Coller Capital drove secondary transaction volume in the first half of 2025 to over $100 billion, the largest six-month period on record. Most similar firms and their clients have never invested seriously in Africa, despite the risk-adjusted returns they could generate and the potential impact those funds could have on the continent.
The secondary market in Africa remains underdeveloped, but the ingredients for change are already in place — aging portfolios, proven transactions, and a growing body of local specialists who know how to execute. What has been missing is the partnership: international allocators with the capital scale backing local players with the sourcing, structuring, and underwriting expertise to deploy it. As the 2010–2016 vintage funds reach the end of their natural lives, that gap is becoming impossible to ignore.
The capital that African private equity has spent two decades building is ready to move, and secondaries are no longer a theory — they are the architecture for what comes next.
Richard Okello is co-founder and partner at Sango Capital.
Guest posts on ImpactAlpha represent the opinions of their authors and do not necessarily reflect the views of ImpactAlpha.
