The value of global private equity deals targeting Africa has more than doubled (137%) in the first half of 2014 compared to the same period last year, according to research by global law firm Freshfields Bruckhaus Deringer.

Mitchell Presser, head of Freshfields’ US M&A group, said: “The market for attractive private equity investments remains very competitive. Private equity investors continue to seek new investment areas that will provide more attractive returns.”

“Africa offers very attractive investment opportunities with exciting growth dynamics. But it remains important for investors to fully understand political and legal risk on a country by country basis. As investors are getting more comfortable with the perceived risks, there is more capital pursuing opportunities in Africa,” he added.

Global PE funds completed 15 deals collectively worth $1.5bn in the period between January 1, 2014 and June 30, 2014, up from 10 deals totaling $621m in the first half of 2013.

As a proportion of total African PE spend (83% in 2014 H1) and deal volume (44% in the same period), global PE firms are now more active on the continent than ever before.

The strong start for global PE players this year follows a turning point for African PE investment more generally in 2013.

PE firms based both domestically and globally invested $4.26bn last year, more than at any point since the global financial crisis.

The previous high was in 2007 when PE firms poured more than $7.6bn into assets on the continent.

Commenting on the study, Freshfields corporate partner Pervez Akhtar, head of Freshfields’ MENA practice, said: “As we move on from the financial crisis, private equity firms are back doing what they do for a living, which is investing. The PE market quieted down significantly during the downturn but is now picking up, because many firms have funds that have not been deployed. They are looking for new markets that will give them a growth story, and some of the returns we see in Africa are staggering compared to those in developed market economies.”

David Higgins, co-head of the firm’s global financial investors group, added: “The increasing interest from the biggest funds is partly as a result of increased risk tolerance, and partly because they’re seeing others do deals in Africa. Sellers are now aware that global funds are willing to transact on the continent and are getting more comfortable selling to them.”

“With lots of funds looking at opportunities in Africa, this has led to an increase in relative prices and there are of course other issues to overcome such as foreign exchange controls. But for the funds willing to invest the time and effort to understand the local markets, there are real opportunities available,” he added.

Analyzing the data by fund type reveals a greater geographic spread of investments from global players in recent years.

As global investors increase their exposure to Africa, they are looking beyond South Africa, historically the destination of choice for private equity investors.

Between 2004 and 2009, 75% of their investment was in South Africa. Between 2009 and H1 2013, this figure was 10%.

More than four-fifths (84%) of the money global funds have invested in West Africa since 2004 has come in the past two years.

They are also beginning to show significantly more interest in East African assets, with 41% of their deals in the region since 2004 coming in the past two years.

Despite the conflicts that have scarred North Africa’s recent history, one-sixth of Africa’s PE transactions over the past decade have been made in the region.

Higgins said: “North Africa, West Africa, South Africa and East Africa are four very different markets, so investors need to have four different strategies. There is greater political risk for particular sectors such as energy or natural resources, where having a local partner is critical.”

“There will be a few bumps in the road, like there always are in emerging markets. But while political risk in Africa remains, the situation gets easier as more deals are done; the lending banks begin to understand the market, and regulators and tax authorities become more familiar with private equity investors,” he said.

Rob Cant, a senior associate in Freshfields’ global financial investor group, said that the biggest global firms will become more prominent in Africa in the future.

The fact that firms like Blackstone and Carlyle, KKR and Warburg Pincus have all made sizable investments in Africa has demonstrated to the market that assets can be found that meet the investment profile of the world’s most sophisticated financial investors, he said.

“As recently as two years ago, only a handful of the global funds were realistically considering investing in assets in the Middle East and North Africa. Today, we have advised many of the world’s top 10 funds as they actively pursue assets in these markets. We are starting to see the same patterns emerge in Sub-Saharan Africa, suggesting that global PE players will continue to look to the continent for future growth,” he concluded.