Niels SCHNECKER
Sah la Parlament si garda la contracandidati
Democratia: uite...nu-i Cei care ma cunosc stiu ca nu sunt si nu am fost un fan al Presedintelui [...]
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NOVEMBER 04, 2011, 10:08 EET
snapshot of the private equity and venture capital industry
The European Private Equity & Venture Capital Association (EVCA)(www.evca.eu) has recently published a special report providing an excellent statistical snapshot of the private equity and venture capital industry as of 2010. It provides a detailed breakdown on sources of capital raised, investment activity, investment per sector and per country, etc. While it is not possible to do justice to the entire report in a short article, I’d like to focus on some of the interesting statistics that came out of this report: Annual investment value peaked at EUR 2.5 billion in 2008, declining slightly to EUR 2.4 billion in 2009, falling to EUR 1.3 billion in 2010. Poland was by far the largest market in 2010, accounting for EUR 657 million of investment (44 transactions), more than 50% of the regional total in 2010. Only 3% of private equity funds raised in Europe were devoted to Central Europe in 2010. With the exception of 2009, in most years venture capital and private equity investment as a percentage of GDP was considerably less in Central Europe compared to Europe as a whole. For example, in 2010, it accounted for 0.119% of GDP compared to 0.314% of GDP in Europe. I interviewed two people for comments on the EVCA report: Robert Manz, Managing Partner and Member of the Board of Enterprise Investors, a private equity firm, and Chairman of the EVCA committee that produced the report, as well as Kai Koppen, Managing Partner for CEE for Riverside, a private equity firm. My questions addressed to both gentlemen pertained to the overall state of the private equity market in Central Europe. In this day and age when we talk about faster growth in Central Europe and convergence towards Europe, should there not be a higher private equity to GDP ratio in Central Europe compared to Europe? According to Kai Koeppen, the answer lies in risk management of institutional money. The UK has traditionally been the dominant market, with a 40% share of the European private equity market, where private equity firms have developed excellent relationships with managers of institutional money. The UK is followed by the Nordic markets and France. It will take time for Central European firms to develop track record and relationships with institutional funders, even though there might be more room for growth in Central Europe than in the UK. According to Robert Manz, private equity in Central and Eastern Europe still has tremendous room to develop. The private equity industry has only a 20 year history in the region; it is still less widely used and accepted in Central Europe compared to more developed private equity markets. In Central Europe there are fewer sizeable deals, the markets and countries are smaller, in short, markets are less developed. This includes the lack of readiness or preparation of companies to take in financial investments. There has been an “equity gap”, that is to say there has been more demand for equity capital than supply, and the equity gap is larger in Central Europe than in Western Europe. According to Mr. Manz, there is a healthy balance between demand and supply of equity capital, and that everything is going in the right direction: there has been a steady upward trend in the number of deals and the value of deals. (Deal flow has increased by a factor of five since 2003). With respect to obtaining leverage for private equity deals, banks were generally unwilling to lend in support of private equity deals until 2003. Bank lending increase nicely until the Lehman crash, where obtaining leverage for private equity deals became extremely difficult. It is now once again no problem for good deals to obtain debt financing. My own personal view as financial advisor is that many more companies would like to receive private equity financing than are able to obtain it, and the single largest reason for this shortfall is their own lack of preparation or suitability to receive private equity funding. This explains why private equity funds invest in only a very small percentage of the deals they examine.
NOVEMBER 04, 2011, 10:01 EET
Ticking Time Bombs: More Volatility on the Horizon
Every business owner and every CEO takes financial and other decisions with some frequency, that depend upon one’s macroeconomic view of the world. This article argues that the likeliest scenario is simply volatility—potentially wild or crazy gyrations—over the coming few years.
JUNE 30, 2010, 13:47 EEST
Drag Along/Tag Along Rights
“Drag Along” and “Tag Along” rights are used by investors to facilitate their exit from an investment. They are methods particularly favored by private equity firms, who almost always do their best to establish a clear exit strategy even before they decide on investing in a company.
MAY 05, 2010, 14:27 EEST
Conditions Precedent Prior to Closing
In the context of buying or selling a company, it is usually the vendor of a business who must satisfy certain CP’s before the investor is obliged to close; but there may also be conditions precedent that an investor must satisfy before the vendor is obliged to close. On rare occasions, it is possible to close a transaction immediately upon signature of a Sale and Purchase Agreement (SPA); more often, however, there is a delay of a few weeks to a few months from the signature of the SPA to closing, primarily due to the need for parties to the transaction to satisfy CP’s.
APRIL 28, 2010, 11:21 EEST
Managing Risk to Build Corporate Value (Part II)
My previous column (Part I of this series) dealt with risks in the valuation of companies, stressing in particular that the higher the risk associated with a company, the lower the value of that company. This is not static: investors’ perceptions of risks constantly evolve as they assess a company and the valuation process is consequently also evolving in tandem. In the context of privately-owned companies, few things are more crucial than the due diligence process, when an investor reviews — in detail — all of a company’s title documents, financial records, contracts, etc. Because of this, it is in the interests of all owners to identify and manage risks well in advance of engaging in serious discussions with investors.
APRIL 07, 2010, 15:20 EEST
Managing Risk to Build Corporate Value (Part I)
Everything has its risks, even getting out of bed in the morning. But that is no excuse for not getting out of bed at all: you can also have a heart attack under the duvet, after all.
JANUARY 12, 2010, 13:42 EET
Should you consider an IPO (Initial Public Offering) for your Business?
Almost every business owner dreams of hitting the jackpot by going public on a stock exchange. Yet when many find out what is involved in taking their company public, they recoil in horror, rapidly coming to the conclusion that this is not for them. This article summarizes the pros and cons of going public for mid-sized businesses in Central Europe.
NOVEMBER 23, 2009, 15:21 EET
Hiring a lawyer to help sell your company or raise capital
If you are looking to undertake a transaction such as raising capital or selling your company, a lawyer will be a vital part of your team. This article will first describe the role that a lawyer will typically play in a transaction, then provide guidance on how to select a firm or individual who may best fulfill that role.
Acest guvern a făcut multe din ce trebuia să facă, cam târziu, dar le-a făcut
"Din 1990 până în 2012 toţi au făcut câte ceva, ce-au putut. N-au făcut destul, asta-i sigur. După părerea mea, şi-am spus-o [...]
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