Promising economic growth expected for this year might turn Romania into an attractive market for the venture capital funds investing in Central and Eastern Europe. Analysts say that Romania could use the favourable conjuncture triggered by the visible slowdown in the Polish economy, which has absorbed the bulk of the money brought in this region by the venture capital funds so far.
“Poland no longer displays the attractive image it used to have over the past years, whereas Romania predicts very interesting growth,” says Cornel Marian, director of Oresa Ventures fund.
Apart from Trans Balkan Fund, which has recently entered Romania, no big moves occurred on the venture capital fund market over the first half of the year. However, the big businesses are usually expected during the fall. Moreover, market sources say that a Scandinavian venture capital fund is eyeing Romania, looking for business projects in which it should invest.
Eleven venture capital funds have entered the market so far, having invested more than 350 million dollars of available capital worth about 550 million dollars. The first fund to enter the market was the Romanian American Entreprise Fund (RAEF), which came to Romania in 1994, being scheduled to have a life span of 15 years. The newcomer is Trans Balkan Fund, having entered the market this year with initial capital of 8 million dollars.
Venture capital investments have actually started at the end of 1996 and the beginning of 1997, when all the other funds, except for RAEF, entered the market. These were Societe Generale Romania Fund, Oresa Ventures, Danube Fund, AIG New Europe Fund, Romanian and Moldova Direct Fund and Baring Central European Fund.
AIG New Europe Fund is the largest investor so far, with 85 million dollars invested in Luxten Lighting, producer of lighting devices and services, Mobil Rom, the mobile telephony operator and Astral TV, the cable TV company. RAEF has made the most diversified investments, as it placed money in textiles, printing houses, telecommunications industry and farming.
The economic fields registering the highest growth are generally eyed by the venture capital investment funds, whose preferences mirror the viable businesses in an economy.