The Central and Eastern Europe (CEE) generates healthy returns for private equity investors that are comparable to those in the emerging nations, according to Marcello Bottoli, operating partner at private equity fund Advent International. He told BR what are the most promising sectors for investment in Eastern Europe and Romania.
How is CEE performing compared to the BRICs?
In my view Eastern Europe is another emerging region. It is more developed than some other regions around the world, but it’s still part of the emerging markets configuration. The returns in Eastern Europe are perfectly comparable to those that can be obtained in Latin America and Asia, with the added advantage that culturally, regulatory wise there is more affinity between CEE and Western Europe than India and China.
What sectors are you targeting in Eastern Europe?
In general we target five sectors that are consistent across the world: general industrial, financial services, telecom and entertainment, healthcare and consumer and retail. The financial services, healthcare and retail sectors are probably three of the most promising in Eastern Europe as well as in Romania. In Romania, we are present in almost all the sectors.
What type of company interests you?
What’s important for us really depends on sectors. In retail and consumer, what is important for us is that there is a brand that has consumer value at least in one country, in this case Romania, that there is a strong management team or entrepreneurs that are willing to partner with us and explore the possibility to grow.
Typically, we like situations where there is growth by expanding internationally. We are among those funds that are present on the ground, so when it comes to international expansion we can offer things that other people can’t.