Low Consumption Daunts Private Equity Activity In Romania

05.11.2011 By Andrei Circhelan

Private equity and venture capital funds will keep discrete their presence in Romania this year, because of low consumption, which is set to recover only towards the end of the year, Wednesday said Cristian Nacu, partner within Enterprise Investors.

"Funds have invested EUR120 million in Romania (in 2010), which is next to nothing, and we were barely visible on the mergers and acquisitions market," Nacu told a seminar on mergers and acquisitions.

"The market's evolution depends on the evolution of the economy. The drivers for growth or decline in the market are investment, export and consumption. Investment is lower, exports are higher and internal consumption is at minimum levels, which shows in the investment appetite of funds," he added.

The year 2010 thus marked a continued decline in the private equity funds' interest for the Romanian market. In 2009, private equity fund investment in Romania cumulated EUR220 million, almost half of the EUR425 million invested in Central and Eastern Europe.

Nacu added he does not expect funds to be more active in 2011, because of the low consumption. In his view, the private equity market should recover in 2012-2013.

Enterprise Investors manages a total capital of EUR1.7 billion, through seven funds. In total, the company has invested EUR160 million so far in Romanian companies operating on various segments.