CEE fundraising growth outstrips Europe

Fundraising for Central and Eastern Europe rose by 60 percent in 2010 to €645 million, according to trade body the European Private Equity and Venture Capital Association, driven mainly by venture and growth funds. Fundraising activity in Europe as a whole grew by just 13 percent, EVCA said.

As well as fundraising, many CEE-focused firms worked to offload assets last year, driving exit activity up by almost 130 percent to €300 million. Corporates were the main acquirers of private equity-backed assets, EVCA said.

Investment activity fell significantly, however, from €2.5 billion in 2009 to €1.3 billion last year, although the number of deals rose as venture and growth players increased their pace of investment. Deal volume rose by 30 percent to 160 transactions, with venture deals up 61 percent and growth capital investments increasing by 38 percent.

Poland, the Czech Republic, Romania, Ukraine, Bulgaria and Hungary accounted for 94 percent of private equity and venture capital investment in the region in value terms, and 68 percent by volume.

Poland remained the region’s dominant market, accounting for more than half the amount invested in the CEE region with €657 million in total – itself more than twice the figure for Polish investment in 2009.

Dorte Höppner, secretary general of EVCA said: “The Central and Eastern Europe region demonstrates how private equity and venture capital can be a major provider of finance for SMEs across Europe. The role of venture capital and smaller buyouts in facilitating growth and development in the region should be a clear message to EU policymakers about the importance of nurturing all forms of SME finance.”

For more on the Central and Eastern Region, please refer to Private Equity International’s June edition, which features a roundtable discussion with three of the region’s top investment professionals.