Private equity and venture capital investment in Central and Eastern Europe last year hit its highest amount since 2009, according to new data from Invest Europe (formerly called the European Private Equity and Venture Capital Association (EVCA), Invest Europe is the non-profit trade association representing European private equity, venture capital and their global investors).
The total investment amount increased 25% year-on-year to €1.6bn, with the number of companies backed matching 2014’s record level. The figures are taken from Invest Europe’s Central and Eastern European Private Equity Statistics 2015 report, launched today.
“Last year’s increase in regional investment activity, at a new post-financial crisis high, points to a healthy and evolving market,” said Robert Manz, Managing Partner at Poland’s Enterprise Investors and Chairman of Invest Europe’s Central and Eastern Europe Task Force. “Central and Eastern Europe continues to develop dynamic businesses and when the time comes to exit, these private equity-backed companies can have the international reach to appeal to global acquirers.”
It was another strong year for private equity exit activity in the region, with a record 97 companies exiting at a total value of €1.2bn – measured at historical investment cost – the third highest year on record. Trade sale was the most prominent exit route, accounting for over half of the divestment value at historical cost. Public market exits made a strong showing, comprising 17% of total exit value at cost.
After 2014’s fundraising high, driven by some of the region’s largest fund managers, the capital raised last year was at a more subdued level of €418m, as fund managers were more focused on investments and exits.
The high level of private equity investments and exits in Central and Eastern Europe last year is just part of the success story for the entire European market. Across the continent, total investments increased by 14% year-on-year to €47 billion, while exits, measured at historical investment cost, matched 2014’s record-breaking €40bn.
Findings from Invest Europe’s Central and Eastern Europe Statistics 2015 report also include:
Over 200 companies received venture capital investment, including nearly 130 start-ups;
Buyout investments increased by a third year-on-year to €1.3bn with 40 companies backed, mostly in the energy & environment and consumer goods & retail sectors;
The highest investment amounts were focused on businesses in Poland, Serbia, Hungary and Romania, comprising 85% of the region’s total investment activity by value in 2015;
91% of companies receiving investment were based in Poland, Hungary, the Baltic states and Slovakia.
“The region has a number of innovative start-ups and interesting companies employing a well-educated and competitive workforce, and the experienced private equity and venture capital investment managers are perfectly positioned to harness their potential,” said Manz.