NewsDeloitte Activity Report: Renaissance of the Private Equity Market in CEE

After a prolonged pause, private equity in Central and Eastern Europe is on a path to recovery, with investors starting to return to the region. These are the conclusions of the Activity Report prepared by Deloitte in cooperation with the Czech Private Equity & Venture Capital Association.

A total of 15 investments were realised in the private equity (PE) and venture capital (VC) area in the Czech Republic in 2016, which is three more than in 2015. However, the average deal value increased substantially, almost fivefold.

“The return of investors to the region is positively affected by the growing economy and the fact that while the activity has been slightly subdued in certain western countries following the Brexit referendum, the CEE region has recently seen several major exits. This has attracted the attention of big players,” adds Ondřej Jež, a Director at Deloitte’s Consulting function. 

The investors behind the Czech transactions were not only local, but often foreign. TA Associates left AVG Technologies, which has been bought by Avast. In the past two years, lesser divestments of local or regional funds have also taken place: Genesis Capital sold five assets, ARX Equity Partners sold three, and the exit of MCI from Invia was also of significance. The market had been expecting these sales for some time as the investment horizons of private equity funds were becoming significantly protracted in the CEE and the Czech Republic.

Furthermore, Deloitte’s survey on private equity funds shows that the mood on the market is much more optimistic than last year. This should support further growth in the number of transactions in the Czech Republic and other CEE countries. The Czech Republic is also likely to play a key role in private equity in the coming years. It is aided by robust growth of the economy, solid foundations of the manufacturing sector, developing technology companies as well as a number of attractive investment opportunities.

To view the full Activity Report, follow this link.