In the past six months private equity funds focused on Central Europe have cashed in on higher exit multiples which will turn to more of a buying focus. This is confirmed by the findings of Deloitte’s latest Central European Private Equity Confidence Survey as the focus on new investments is reaching its all time high.
Key findings
- Adding value is now a necessary element
Buying at low multiples and selling higher is no longer enough.
- Continuing optimism regarding economic performance
Short-term expectations by private equity professionals confirm medium and long-term forecasts for improving economic activity in Central Europe. Countries of the reviewed region should outperform old EU member states.
- Previous focus on new investments only strengthened
After successful fundraising and many exits in 2006, the focus is now on new investments (86 percent of respondents) over portfolio management and raising new funds (both 7 percent).
- Significant buying dominates investors’ activities
Due to success in raising new funds in 2006 and as new funds enter Central Europe, the region should experience strong activity in private equity. Expectations are clearly indicating a focus on buying more than selling with 80 percent of respondents.
Major investments in the third quarter 2006
| Company | PE House | Date | Value* | Stake |
| Radiokomunikace, a.s. |
Mid Europa Partners, Lehman Brothers Private Equity, Al Bateen Investment Company |
November |
1,190 |
100% |
| BorsodChem rt. |
Permira |
November |
1,056 |
100% |
| Aero Vodochody, a.s. |
Penta |
October |
103 |
100% |
| KCW Ultimo |
Advent International Corp. |
October |
n/a |
100% |
| Polmos Lublin SA |
Oaktree Capital Management LLC |
October |
47 |
100% |
| Standard Profil |
Bancroft |
September |
71 |
100% |
| Skarbiec Asset Management Holding SA |
Enterprise Investors |
September |
39 |
100% |
| SC Macon SA |
Enterprise Investors |
September |
35 |
n/a |
| Tatra, a.s. |
KBC Investco NV |
September |
62 |
81% |
| *) In millions of EUR |
About the survey
Deloitte’s Central European Private Equity Confidence Survey reflects the expectations of private equity professionals focusing on Central Europe. The survey has been conducted twice a year since March 2003 and the results are based on questionnaires sent to professionals in private equity firms covering the following Central European countries: Estonia, Lithuania, Latvia, Poland, Czech Republic, Slovakia, Hungary, Romania, Moldova, Bulgaria, Macedonia, Slovenia, Croatia, Bosnia & Herzegovina, Serbia, Montenegro, and Albania.
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