Rosca puts Gemisa's portfolio at 35m euros

Dragos Rosca, CEO of investment fund Gemisa Investments, says he decided against two exits and two acquisitions at the end of last year, amid a frozen M&A (mergers & acquisitions market). However, the crisis allows for purchases that could not be made in other times due to the companies’ reluctance to sell. “The economic environment will continue to degrade, so that the value of many companies will go down because their assets are degrading as the environment in which they are operating degrades. The companies will face a decline in profits, some will experience liquidity problems, so their shareholders will be under pressure to accept lower prices when negotiating a transaction,” Rosca told ZF in an interview. According to the head of Gemisa, the portfolio of the investment fund currently amounts to 35-40 million euros, “slightly up against last year,” while this year’s progression depends on the “state of the economy”. “There is a downward adjustment in multiples, which is generated by two factors. On the one hand, it had come to very large sums being paid because access to bank financing for the acquisition of companies was easily accessible, so aberrant multiples were paid. On the other hand, many such transactions were sealed by fresh-out-of-college investment managers who, having easy access to bank financing due to the positive track record of the funds they were working for, ended up sealing transactions just so they could place the funds’ money rapidly and then collect their annual bonuses,” Rosca says.