Romania si Moldova
Target Market
In 2006 Romania has overtaken Czech Republic, becoming the third largest destination of FDI flows among the recently acceded European Union member states. Moreover, in 2007, it was the second state after Poland in terms of the amounts received, even surpassing it at the number of greenfield investments, having 366 investments in this field. From the total FDI stock in Romania, around 80% come from the EU, out of which over 45% come from just three countries, also major investors in Romania: the Netherlands, Austria and Germany.
While growing rapidly, the existing FDI stock in the domestic economy - EUR 2,400 per capita - is still the lowest in EU (and is only at 60% of the average level of the 10 newly admitted EU members - i.e. EUR 4,100).
Romania has the 9th largest territory (roughly 237,500 sq km) and the 7th largest population (with 21.5 million people) within European Union. Its capital is Bucharest, the 6th largest city in the EU (with 1.9 million people). As per World Bank classification, with a GDP of EUR 115.9bn and a GDP per capita of EUR 5,390 in 2009, Romania is an upper-middle income country.
We believe that growth capital investments in Romanian Small and Medium Enterprises will continue to be a source of superior returns due to:- Latin behavior, which favors consumption over savings
- High demand of growth capital (as most of the SMEs are already highly-leveraged while other private funds active on the market are targeting mostly larger-scale buyouts).
- Lower degree of sophistication and competitive intensity of the private equity sector (compared to the other EU countries and the rest of the world)
- Private equity investments in economic downturns have historically shown significantly higher returns than the others (EVCA study)
Moldova is a fast growing market with 3.6mn inhabitants sharing language and consumer habits with Romania, creating significant potential for leveraging synergies; the country has a significant unfulfilled demand for growth capital (net FDI flow in 2009 - only EUR 60mn) and, as signalled by the last elections'' results, high aspirations for EU convergence
