Against the backdrop of a stable economy in the region and growing macroeconomic indicators, Romania gained investor confidence, becoming a major market in the area, alongside Poland, according to the Deloitte Central Europe Private Equity Confidence Survey.
"We have witnessed a significant increase in the activity of investment funds in Romania lately, after several projects have been successfully concluded, both at the level of raising funds and at exit level," said Radu Dumitrescu, Partner at Deloitte Romania.
"Among the largest transactions completed lately is the acquisition of Profi by MEP or the acquisition by Allianz Capital Partners of a minority stake in EoN Distributie Romania. I expect that the investment funds present in Romania will continue to conclude large transactions in the next period, and I would not be surprised to see transactions worth hundreds of millions of euros in which to be an investment fund involved. Romania is attractive for investment funds in sectors such as farm, petroleum and natural gas, financial-banking services or production. Romania is now playing in the same league with Poland and I am convinced that we have finally reached the map of the major investment funds. "
After a year of post-Brexit turbulence in Europe and Eastern Europe, we see the signs of a comeback, indicating one of the best years for both investment and exit as many investment funds in the region have generated very good results for investors.
After a slight increase in spring, investor confidence in Central Europe grew more in the past six months, reaching 130 in the Deloitte Index, from 113, thus marking the highest confidence level in the past three years. This is mainly due to confidence in the economy, with 90% of respondents estimating steady growth (64%) or improvement (26%) in the coming months.
Two-thirds of respondents in the Deloitte survey expect to concentrate their efforts mainly on acquisitions, with their funding going on progressively, while twice as many estimates that funding will increase over the next two years. 36% of respondents estimate the size of transactions to grow as well, this being the highest percentage in the last 10 years.
This indicates confidence in investment funds in funding prospects, as the leu share of funds in the region comes from outside.
The survey also shows that sellers' high expectations of price remain and may increase: one third of respondents (31%) expect sellers to get more for their assets in the coming months and the remaining 61% keep their expectations current. But most (54%) feel that vendors have higher price expectations over the last half of the year.
"Markets with good liquidity are good for transactions, and this can help price, which is useful to sellers, and may be one of the reasons why the exit was strong," said Mark Jung, Deloitte Partner and Industry Leader dedicated to investment funds.