Funds with the highest liquidity in the region are Mid Europa Partners, with €1.35 billion, and Marfin Investment Group and EQT, each with €1 billion.
Private equity funds have a total €5-6 billion to invest in Central and Eastern Europe, and Romania usually attracts one third of regional investments.
The current global financial crisis boosted interest of private equity funds in emerging markets, in which they can effect acquisitions with their own funds, without requiring bank loans. In such countries, companies are worth dozens or hundreds of millions of euro, as opposed to Western European countries, where the market value of many companies amounts to billions of euro.
“It is expected that the number of deals in Romania will increases in 2009, and probably also their value,” GED Capital fund head, Robert Luke, said. He is also President of the South Eastern Europe Private Equity Funds Association.
Investment fund managers expect a short-term 30 percent drop in the value of Romanian companies. The opinion of Romania’s wealthiest businessman, Dinu Patriciu, is more drastic: “What one could buy with a dollar now costs 20 cents.”
Prior to the financial crisis, the fact that local entrepreneurs were expecting high prices was the main reason keeping funds back from becoming stakeholders in Romanian companies. Within six months, however, the financing needs of Romanian entrepreneurs will become acute, fund heads estimate.
Fields most impacted by the crisis will also be the favorite targets of investment funds, namely financial services, construction, tourism, automotive, and durable goods retail.
“As happens after every shock, entrepreneurs are still in denial. But the fog will soon lift,” according to the Managing Partner of Enterprise Capital fund Administrator, Horia Manda.
