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Enterprise Investors: Investors are hard to convince to come to Romania
Investors are hard to convince to allot money for the purchase of companies in Central and South-eastern Europe, Romania included. Without Poland the area is not sexy at all”, although compared to last year there are more opportunities in the local market, says Cristian Nacu, the head of Enterprise Investors.
“Compared to 2013, the market feeling this year is that there are more investment opportunities, there are more sale businesses available and more entrepreneurs ready to invest. It is hard to estimate a market value this year because transactions are being negotiated and could close next year. On the other hand, the activity of funds in the area is low, as well as amounts of money they allocate for countries in Central and South-Eastern Europe,”said Nacu at a conference on economic topics.
Enterprise Investors gathered 314 million euro in the Polish Enterprise Fund VII. “It was the most difficult fund gathering process, as the area is no longer attractive for investors. It is hard to convince them to invest here and without Poland the area would not be sexy. Investors went to areas which seem more attractive- Asia and BRIC. The fact that we are not good for fund raising, that we do not invest in creating policies to back entrepreneurs and the business environment, the closeness to conflict areas are the reasons invoked by investors”, Nacu said.
He pointed out that it is not admissible that there should not be any projects as long as Romania produces more cars than Italy and the two manufacturers Ford and Dacia ask the authorities to build a highway to transport cars more easily.
Enterprise Investors has invested 200 million euro so farm being involved in three companies so far, - retailer Profi, the group of firms Macon Deva and Smartree company. “We are discussing a transaction in Romania, which could be completed this year or maybe next year, but the cycle of such a transaction is of over 6 months. The attractive fields are IT, health services and retail,”Nacu said.
Last year the investments of private funds in Romania grew for the first time in the last 4 years, the advance being 2.5 times compared to 2012, to over 70 million euro. The local market ranked third in Central and Eastern Europe, after Poland and the Czech Republic.
Equity private funds are investment vehicles whose capital is fed by private entities and are an alternative for companies to the classic financing solutions by means of the bank and of the stock market. Besides the invested capital, equity private funds are involved in company management for a certain period of time.