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CEE private equity fundraising reaches EUR 1.8 bln in 2018

Private equity fundraising for Central and Eastern Europe (CEE) hit the highest annual level in a decade in 2018 at EUR 1.8 billion, according to new data from Invest Europe, the non-profit trade association representing Europeʼs private equity, venture capital and infrastructure sectors, as well as their investors.

Buyout funds in the CEE raised EUR 1.1 bln, while the region’s venture capital funds attracted over EUR 500 million for the second year in a row, reveals Invest Europe’s 2018 Central and Eastern Europe Private Equity Statistics report, released recently.

Private equity investment in companies across the CEE reached EUR 2.7 bln in 2018, the second-highest amount ever achieved, following 2017’s record EUR 3.5 bln. The number of companies backed increased by 50% 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 venture capital.

The number of private equity and venture capital-backed exits in the CEE reached an all-time high of 128 companies divested in 2018. This represented a total value of over EUR 1 bln for the fifth year running, measured at historical investment cost. Poland accounted for over half of this total exit value, with EUR 575 mln. 

“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,” says 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.”

Strong GDP growth in CEE

All countries in the CEE region covered by Invest Europe’s report surpassed the European Union’s 2.1% GDP growth rate in 2018, according to data from the International Monetary Fund (IMF). Eight of the countries achieved annual growth above 4%, with Poland, Hungary and Latvia experiencing particularly high growth rates, reaching 5.1%, 4.9% and 4.8%, respectively.

Poland saw the CEE’s highest amount of private equity investment, with its companies receiving EUR 850 mln in total last year. The Czech Republic was close behind, with EUR 767 mln invested into its companies via private equity and venture capital funds. Hungary had the highest number of companies receiving investment, with over 190 backed last year, almost half of the regional total.

The biotech and healthcare sector took the highest share of the CEE’s private equity investment, with 32% of the total value in 2018, while consumer goods and services companies received 27% of funding. The region also has strong technology start-up credentials, including Czech cybersecurity group Avast, which was 2018’s largest tech initial public offering (IPO) on the London Stock Exchange at a valuation of GBP 2.4 bln.

Meanwhile, Romanian-founded robotic process automation firm UiPath achieved a USD 7 bln valuation during a funding round earlier this year, making it one of the world’s most valuable artificial intelligence companies.

Invest Europeʼs research database is the most robust and authoritative in the industry, the association claims. The 2018 Central and Eastern Europe Private Equity Statistics report is free to download from the association’s website, investeurope.eu.