Private equity investment in central and eastern Europe has reached its highest level since 2009. This is the thrust of a new report from Invest Europe (formerly EVCA, European Private Equity & Venture Capital Association).
The €1.6bn recorded in 2016 slightly surpassed the 2015 result, it calculates. Invest Europe says this underlines the trend of increasing annual investment value in the region since the market touched bottom in 2013.
Investment activity in CEE countries represents, however, a mere 3% of the broader European total. Consumer goods and services was the most targeted sector, attracting 23% of investment. Information and communication technology was second with 22%.
Invest Europe chairman Robert Manz, courtesy of Invest Europe
Robert Manz, managing partner at Poland’s Enterprise Investors and the chairman of Invest Europe’s Central and Eastern Europe Task Force, describes private equity activity in the region as strong in all key areas last year.
He sees a vibrant market with robust interest from general partners and limited partners. “The region’s fund managers are hard at work maximising buying and selling opportunities, while institutional investors are showing renewed appetite for the region,” he says.
As always, private equity investment activity in the region 2016 was concentrated in a few countries. Poland remained the leading country. It is home to almost a quarter of the companies receiving funding and accounted for 45% of the region’s total investment value.
Five account for 81%
Poland was followed by the Czech Republic, Lithuania, Romania and Hungary. Invest Europe says these five sovereign states combined accounted for 81% of total CEE investment and two-thirds of the investee companies which benefitted.
Buyout investments remained stable year-on-year at €1.2bn. Growth capital funding continued as the region’s second most important type of private equity investment at €285m, 16% up year-on-year.