Romania offers limited exit options for private equity investors, with unattractive stock market and not enough funds for SEE
2013-07-09 17:06:56
Private investors have limited exit solutions from their investments in Romania, with many of private equity funds having already exceeded their regular investment timeline, according to EY. The country offers limited exit options, as the Bucharest Stock Exchange is not yet considered a solution for private equity funds, while some of the potential buyers have not yet managed to raise the needed money for investments in Central and South Eastern Europe. “This means that many investment funds are focusing on making an exit, or at best on adding to their portfolios, in order to increase the attractiveness of the companies they own,” according to EY.
Elsewhere in the world, secondary buyouts (SBOs), where a private equity fund sells a company it owns to another similar fund, are among the most popular types of exits. These deals cover 28 percent of the total number of exits, higher than in 2011, when it was at 26 percent, according to mergermarket.
The market offers little liquidities, while buyers are less interested, or take long to decide about a purchase, which further limits the exit options. Data collected by Centre for Management Buyout Research, Equistone Partners and EY reveal only 68 exits made by private equity firms in Europe in the first quarter of 2012, which is the lowest figure since the third quarter of 2010.