Wealthy investors in Kenya have increasingly been switching to the private equity sector according to the latest Knight Frank report - Kenya Market Update.
The report, which covered the second half of 2023, indicated that the appetite for investing in private equity took an upward trajectory within the last five years.
Four other sectors that are attracting billions in investments are health, data centres, cold storage systems and purpose-built housing.
"In the last five years, there was a high appetite for investments in alternative sectors in Kenya, with private equity firms ruling this market," read the report in part.
"From investments in the health sector, and data centres, to world-class cold storage systems and purpose-built housing, foreign direct investment was on its upside as investors raced to be the first to fill the market gap," read the report in part.
In the health sector, Columbia Africa is working to set up a 152-bed hospital in Nairobi. Another hospital with a capacity of 150 beds is also in the works within the capital's metropolis.
"Public healthcare provision is expected to see changes in 2024 after Kenya introduced a new legal and institutional healthcare framework via the Primary Health Care Act, 2023, the Digital Health Act, 2023, the Facility Improvement Financing Act, 2023, and the Social Health Insurance Act, 2023. The Acts will be implemented from 2024 onwards," added the reports.
According to the report, tycoons have been turning to the sectors while moving away from the real estate landscape which has continued to grow more volatile.
A real estate agent told Kenyans.co.ke that in the last four months, investors opted to invest their money through bonds after the prices of houses shot up, reducing the purchasing power.
Understanding Region's Private Equity Activity
Private equity firms are institutions that consolidate investment funds on behalf of investors, whose goal is to buy or invest in companies before eventually selling them at a profit.
In September last year, the East Africa Venture Capital Association (EAVCA) report indicated that Kenya's private equity and venture capital sector continued to grow accounting for the biggest percentage of all deals made within the last decade in East Africa.
Kenya recorded 69 per cent of the deals while Uganda came in at 12 per cent. Tanzania and Ethiopia trailed with just 6 per cent each.
In the period, the country's private equity firms recorded Ksh1.3 trillion in deals.
