CEE and CIS Data Insight (Year-End 2018)
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Fund managers deployed USD2 billion in CEE and CIS in 2018, led by Advent International’s USD939 million equity injection in support of its buyout of Czech pharmaceuticals manufacturer Zentiva. While the larger CEE-dedicated funds that characterized the earlier days of private capital in Central Europe have been less prevalent in recent years, pan-European buyout shops continue to invest selectively in the region. Furthermore, these firms have become a significant exit channel for CEE-focused GPs. Overall, managers completed 13 secondary exits in 2018, up from just six in 2017. In the absence of new funds targeting Russian opportunities, investors have flocked to mid-market funds focused on former Soviet republics, led by Horizon Capital’s USD200 million Ukraine- and Moldova-focused Emerging Europe Growth Fund III. Managers also reached closes for funds focused on the Baltic states, Belarus, and Kyrgyzstan—the latter being the first such fund recorded by EMPEA. While Russian private capital seems unlikely to reach its former scale in the near term, investors are showing renewed interest in its neighboring markets.