Private Equity Investment CEE 2013. 61 Mln Invested in the 3 Baltic Countries.

Private equity investment in CEE in 2013 fell to EUR 783 million, or by 22%, compared to 2012; despite this, the number of companies that have received investment increased to 241. The investment value in money terms is still only a third of what was reported in 2008 and 2009, the high points during the last 10 years.

Another important measure compares the private equity investment to gross domestic product (GDP). By this measure, CEE with 0.063% significantly lags behind the European level of 0.253%. It is interesting that Estonia has become the regional leader with investment reaching 0.149% of its GDP in 2013, while Denmark with 0.739% is an undisputed European champion by this measure. With 0.047% Latvia ranks a notch below Lithuania, which reports 0.051%, but is still ahead of a number of countries, including Slovakia and Slovenia. At the very bottom of this ranking is Greece with a paltry 0.003%.

Latvia invested EUR 15 million in 5 companies while EUR 18 million was invested in 38 companies in Lithuania and EUR 28 million in 10 companies in Estonia. Actually, by the number of investee companies, Lithuania only ranked behind Poland and Hungary in 2013.

Exit activity

Apparently to avoid making assumptions, EVCA traditionally accounts for exits at their original cost. By this measure, the exits in 2013 have declined by 31% – to EUR 741 million. On the European scale this is really a drop in the bucket and accounts for just 2.2% of the total European divestment. In total, EVCA has recorded 88 exits in CEE spread over the whole region.

As much as 11% of all the exits were made through a write-off. This figure is quite comparable to the European average, but high for the CEE. It should be noted though that Ukraine alone accounted for 60% of all the write-offs in the region. In the exit category, with reported EUR 46 million, Latvia ranks ahead of Estonia with EUR 33 million and Lithuania with no exits recorded at all.

Fund raising activity

The amount of private equity and venture capital funds raised fell by 37% to EUR 433 million in 2013, which goes against the trend in Europe where fund raising had almost doubled during the year. To put things into perspective, the whole CEE accounted for less than 1% of funds raised in Europe, a substantial decrease compared to the 2.8% the year before.

The public sector still remains the leading single source of funding with 48% coming from the government agencies in 2013. This again is quite different from the rest of Europe where the leading source is pension funds, alone accounting for 33.5% of total funding. In comparison, in CEE only 5.5% of funds raised came from pension funds.

A. Jurcans in B2Baltic




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