Private equity investment in eastern Europe hits six-year high


The total amount invested in the region increased 25% year-on-year to €1.6 billion, according to new data from the trade body Invest Europe. That is the highest annual amount since 2009, when €2.4 billion was invested.

Buyouts accounted for €1.3 billion of the total – the third consecutive annual increase in the value of buyouts in the region.

Robert Manz, a managing partner at Warsaw-based buyout firm Enterprise Investors and chairman of Invest Europe’s central and eastern Europe task force, attributed the uptick in investment to a number of pan-European and global buyout firms looking with renewed interest at the region.

Investments in the consumer and retail sectors accounted for almost a third of the total amount deployed in the region. Interest in these sectors from buyout houses is showing no signs of slowing.

Earlier this year, London-based firm Bridgepoint invested €247 million in Warsaw-listed toy maker Smyk. A number of other assets, including the Mid Europa Partners-owned retail chain Zabka and the Enterprise Investors-owned Romanian retail chain Profi, are also attracting interest from buyout firms.

For private equity firms looking to sell assets, appetite from buyers, particularly trade ones, remained strong. Ninety-seven companies were sold in 2015 at a total value of €1.2 billion as measured by historical investment cost (the total value of the companies when they were first acquired), with the figure the third highest on record.

Manz said the high number of divestments occurred as a consequence of the cyclical nature of private equity investing – as investments made during the pre-crisis “boom” years were now maturing, ready for exit. He said: “You are seeing that investment wave turn into a divestment wave.”

And the increased interest in the region in 2015 is not likely to be a one-off.

Manz continued: “The investment and exit numbers should stay quite robust because of the trends mentioned before. The interest of more pan-European and global players in the region will also help drive investment. On the exit side, there are still a number of portfolio companies to be exited and that becomes a continuous cycle.”

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