about us | newsletter | contact | archive | members area
Ana Maria Icatoiu, Smart Eco Plus
There are laws which have been under discussion for years - not healthy for the market»
  Features:      COUNTRY FOCUS   |   SECTOR ANALYSIS   |

Taking advantage of the market

Businesses that exploit the booming market continue to be top targets for venture capitalists, argues Cornel Marian, investment manager at Swedish investment company Oresa Ventures

February 2008 - From the Print Edition

Most private equity investments are betting on the growth in the Romanian economy and are looking to finance companies that benefit from this development.
Investment companies such as ours like business services. This takes into account companies who provide services and goods to the local market, including construction materials, health-care, financial services and retailers. For example, we recently invested in Poland in accounting and trust services, human resources, recruitment and training companies.
There are also quite interesting opportunities in real estate service such as in evaluations, transactions and real estate project management. This includes investors in real estate who will need to maintain the properties while they are away Ė and undertake basic management activities such as collecting rent or changing light-bulbs. This demand will increasingly need more specialist agencies.
The impressive investments through the line in the automotive sector, such as Fordís recent purchase (pending the European Commissionís approval) of the former Daewoo Factory in Craiova, Dolj county, and Renaultís ongoing investments in the Logan car brand in Pitesti, Arges county, will continue to attract more car component suppliers. Companies that came to Romania five years ago from western Europe or the Far East making cabling for cars now have sales of over 200 million Euro. This sector will continue to rise.

Previous winners

In the past five years in Romania private equity made money in telecom, such as in the mobile phone operator brand Connex, owned by Mobifon, which was bought out by Vodafone in 2005 and cable company Astral Telecom, which was sold in 2005 for 335 million Euro to US operator UPC. In telecom investors have poured in hundreds of millions and made billions.
There have also been high margins in industries such as financial services, where BNP Paribasís consumer credit arm Cetelem bought out Romanian-based counterpart Credisson in 2005 and in 2006 GE Money in one package bought leasing company Motoractive, consumer finance entity Estima Finance and mortgage loans company Domenia Credit for 140 million Euro.
All financial services continue to be interesting.
Pharmaceuticals has also offered effective returns in the last three years.
In 2007 there was a lot of mergers and acquisitions activity in every sector. This included movement in the banking and financial services, real estate acquisitions and business services. Retail is also attractive following Enterprise Investorsís sale last year of its chain of supermarkets, Artima, to Carrefour.
In IT and Internet companies in Romania, little has been invested in these businesses and the returns have not been large. This could be an area where higher value could be made in the future.

Private equity still waiting

From a private equity perspective in 2007, there was more talk than action in the sector.
In the EU, Romania is not number one, but is in the top three in the attention of international private equity firms. In many areas, it takes time to identify the best deals before such a firm will make an acquisition.
On a weekly basis, I talk to people wanting to invest in funds. We have monthly calls from big money managers who want to invest in Oresa Ventures or large private equity firms who want to co-invest in projects in Romania.
Private equity firms have shown a high level of discussion and enthusiasm for businesses in Romania, but deals of this scale do take time. The rate of interest to execution takes from eight months to one year.
In the next one or two years we will see this enthusiasm transforming into real deals.



COMMENTS
There are 0 comments:

 
ADD A COMMENT
 
Name
Email
Comment
Validation Code
   
 
 

0 Comments  |  3791 Views
Daily Info
Groupe Renault launches energy stationary system from electric vehicle batteries in Europe

Groupe Renault announced today the launch of Advanced Battery Storage, a stationary storage system for energy developed exclusively from EV batteries.

Crosspoint assisted land transaction for 8,000 sqm residential project in Bucharest

The real estate consultancy company Crosspoint Real Estate has assisted the sale of a land plot by a private investor to an entrepreneurial group with full Romanian ownership....

Fondul Proprietatea concerned about draft proposing exemption of state-owned companies from corporate governance

Fondul Proprietatea expresses significant concerns about a new legal draft, currently discussed in the Commitees of the Chamber of Deputies, which proposes the exemption of 10...

President Iohannis to attend UN General Assembly in New York

Romanian president Klaus Iohannis will be in New York until Friday to attend the 73rd General Assembly of the United Nations.

Coldwer Banker Romania appoints Georgia Cailean as new CEO

Coldwell Banker Romania has appointed Georgia Cailean as new CEO. Georgia Cailean is a member of the Royal Institution of Chartered Surveyors, specializing in Corporate Real E...

 
 
   
advertising

advertising

advertising

advertising

advertising

More on Features
French investments at a glance: Interest still high

France, Romania's fourth largest foreign direct investor, has been around since the early 1990s, with flagship names the likes of Societe Generale or Groupe Renault taking ...

US calls for coherent, long-term strategy

As USA celebrates 4th of July, its eyes are wide open on the latest developments in Romania's ongoing struggle for the rule of law. Still, the country is one of the fastest...

Romanian energy industry: Challenges to Overcome

With a national strategy draft still to be approved, Romania faces many challenges, as the energy market is striving to find a way to attract major investments that are cri...

EnergyPal: The market must invest in innovation and develop worker qualifications

Romania's facility management sector in 2017 has seen changes in terms of increased market dynamic due to new office developments and also logistic sector growth, according...

Romanian office market ripening, in both leasing and acquisition

From the investment standpoint, lower rates of return and increased liquidity lure the investors, Andreea Paun, Managing Partner, Griffes said in an interview for The Diplo...

ISS: External FM market volume will grow as more Western European FM companies open subsidiaries in Romania

In the last few years as well as in 2017, the Romanian FM market has been in the process of maturing, focusing more and more on quality, efficiency and added value, demandi...

Digital Finance - driving force for the banking industry

Digitalization is radically transforming the banking industry, enabling new products, services and business models. This transformation will take time to complete, forcing ...