Southern Africa’s private equity sector appears to be catching its breath, and, crucially, preparing to move. That is the clear, consistent theme running through the SAVCA Private Equity Industry Survey 2025: cautious optimism, a rebalancing of strategy toward product diversification, and a renewed emphasis on environmental, social and governance (ESG) frameworks that are beginning to shape returns as much as compliance. As SAVCA’s Interim Executive Director Nicola Gubb puts it in the foreword: “Dealmaking gathers momentum, confidence is returning to the deal environment, with many firms preparing for increased activity and exits.” That sentence alone sets the tone for a report that reads as much like a market status update as a call to action for institutional and regional investors.
A cautious upswing in deal activity — what the numbers say
The survey finds that roughly half of Southern African private equity firms expect “elevated” deal activity through 2025, with 60% anticipating further strength into 2026. Put simply: asset managers and deal teams are positioning for more transactions after a period of relative restraint. This is not blind optimism. The report’s data show providers responding to macro uncertainty by favouring strategic, focused growth rather than indiscriminate scaling, deal teams are hunting for quality rather than quantity.
One of the most notable shifts is the pronounced interest in private credit as a product: 86% of Southern African respondents cited private credit among their preferred diversification strategies, up sharply from the previous year. Yet private credit still represented a small slice of assets under management at the end of 2024 (around 6% of FUM), underscoring the gap between intent and current allocation. This signals an industry gearing up to plug financing gaps in the region, for working capital, structured financings and bridge loans, without necessarily taking on equity risk.
ESG moves from compliance to value creation
ESG no longer sits at the periphery. The report documents a deepening of ESG’s role in investment decisions, with limited partners (LPs) pushing for more robust frameworks. While data quality remains a constraint, 42% of Southern African firms cited data as the main barrier to ESG progress, a majority reported that ESG strategies have enhanced exit proceeds. In plain language: funds that invest in sustainability and governance measures are beginning to see those investments reflected in sale prices. That matters for managers who increasingly face dual objectives: delivering financial returns while meeting the impact and compliance expectations of global capital.
Transformation and diversity: progress with caveats
On transformation, a live issue in South Africa and throughout the region, the picture is mixed. The report flags meaningful advances in black ownership and leadership within firms and portfolio companies, but also warns of slippage in gender representation at board level. Positive change at the executive level of portfolio companies (greater female representation) suggests progress is being made closer to operations; yet board-level diversity has cooled. For investors and policymakers alike, these are nuanced signals: progress is real but incomplete, and the industry must guard against complacency.
Fundraising, exits and allocator sentiment
Allocator behaviour, now surveyed directly in this edition for Southern Africa, offers instructive detail. Southern African allocators hold a larger share of alternatives in real assets and infrastructure than their global counterparts, and they express keen interest in funds with exposure to infrastructure and healthcare. While some allocators expect fundraising to remain steady, a material portion (roughly one-third) are more optimistic about a fundraising rebound in 2025. Exits are also expected to rise: 57% of Southern African PE firms and 66% of allocators anticipate increased exit activity, which would be a welcome source of realised returns and liquidity for reinvestment.
Market risks and operational headwinds
The survey does not shy away from downside risks. Geopolitical concerns top the list for many global firms; for Southern African allocators, an over-saturated deal market and the risk of deals drying up are key worries. Operationally, poor quality data and limited capacity for robust ESG measurement are recurring themes. For fund managers, the lesson is plain: strategy must be matched with capability, the ability to collect, analyse and report meaningful non-financial and financial metrics is now table stakes for attracting LP allocations.
Plain-language takeaways from charts and tables
The report’s charts show a multi-year pattern: fundraising volumes rose sharply in certain periods, moderated through 2023–24 and now look set to stabilise as investor confidence returns. Allocation tables reveal a tilt toward real assets and infrastructure among Southern African allocators, while private equity still holds a substantial share. Exit-activity graphs corroborate the survey language: more respondents expect exits in 2025. In other words, the visual data and survey responses tell the same story, an industry shifting from defensive postures to selective growth opportunities, with product diversification and ESG integration central to that shift.
What this means for practitioners and investors
For fund managers, the practical implication is to beef up capabilities: build ESG data systems, develop private credit teams where suitable, and prepare for increased exit execution. For limited partners and institutional allocators, the results underline the value of engaging with managers that demonstrate operational depth and evidence of responsible value creation. And for regional policymakers and development partners, the trend toward infrastructure and healthcare highlights opportunities to channel catalytic capital into sectors with measurable social returns.
Closing note — meet the market
The SAVCA survey charts an industry in transition, prudent, purposeful and increasingly sophisticated. For anyone wanting to hear these themes discussed in person, meet several of the report’s active investors and fund managers at the Startup Bank Conference (3–4 February 2026, Johannesburg). That forum will be one of the best opportunities this year to meet allocators, GPs and industry practitioners who are shaping the next chapter of private capital in Southern Africa.