Emerging markets CEE: getting investors on board

The question preoccupying Anne Fossemalle, the European Bank for Reconstruction and Development’s director of equity funds, is what the next geopolitical crisis will be.

“I work in areas like Central Asia, the Caucasus, Mongolia, Greece, Turkey and North Africa, which is a younger portfolio for us, so geopolitical matters are at the forefront,” Fossemalle says.

“I want to see the markets where we work becoming very attractive for LPs again and I can see that even though the returns are good and it’s a good time to invest, because of geopolitical issues investors aren’t going to be flying in.”

Despite rich opportunities brought about by issues such as a lack of health and education services, it can still be tough to get investment committees on board.

“In Poland, industry entrepreneurs who created their companies 25 years ago are now ready to exit. There are great opportunities for PE to invest,” Fossemalle says.

“An investment officer looking at making an investment in Turkey might be really keen on a deal, but their colleagues on an investment committee headquartered in the US less so. There’s always that gut reaction when you are sitting on an investment committee. Is this an environment that’s conducive to successful investments?”