BY Fraser Tennant
Private equity (PE) fundraising for Central and Eastern Europe (CEE) hit the highest annual level in a decade in 2018 with €1.8bn, according to a new report by Invest Europe.
In ‘2018 Central and Eastern Europe: Private Equity Statistics’, the association reveals that buyout funds in CEE raised a total of €1.1bn last year, while the region’s venture capital (VC) funds attracted over €500m for the second year running.
Furthermore, PE investment into companies across CEE reached €2.7bn, the second-highest amount ever achieved, following 2017’s record €3.5bn. The number of companies backed increased by 50 percent year-on-year to almost 400, also the second-highest level on record. This was driven by a sharp increase in CEE companies supported by VC.
The number of PE and VC-backed exits in CEE also reached an all-time high in 2018, with 128 companies divested. This represented a total value of over €1bn for the fifth year running, measured at historical investment cost. Poland accounted for over half of this total exit value with €575m.
“The strong levels of private equity fundraising, investment and exit activity in Central and Eastern Europe in 2018 demonstrate that the region continues to develop as an attractive investment destination,” said Robert Manz, chair of Invest Europe’s Central and Eastern Europe Task Force. “Global investors see that private equity and venture capital investment is one of the best ways to access the region’s robust markets and high-growth companies.”
In addition, Poland saw CEE’s highest amount of PE investment with its companies receiving €850m in total last year, while the Czech Republic saw €767m invested into its companies via PE and VC funds. Hungary had the highest number of companies receiving investment with over 190 backed last year, almost half of the regional total.
In terms of sectors, biotech and healthcare saw the highest share of CEE’s PE investment, with 32 percent of the total value in 2018, while consumer goods and services companies received 27 percent of funding.
The report also notes that the CEE region also has strong technology start-up credentials, including Czech cyber security group Avast – which was 2018’s largest tech initial public offering (IPO) on the London Stock Exchange at a valuation of £2.4bn.