The shrinking growth rates in some sectors, rising inflation and the falling RON will trigger a correction in the value of Romanian assets, believes Emma Popa-Radu, head of the Romanian office of investment fund Advent International.
"Certain sectors have been overvalued, following trends on the international markets. Some sectors will continue to grow, but at slower rates than the ones posted over the past 2-3 years. Romania will continue to be attractive to investors, but this will also depend on the correlation of evaluations to international or sector corrections," said Emma Popa-Radu.
She believes that generally the yields investment funds derive on the Romanian market have risen because of several factors that include the positive results witnessed by some, access to loans for leveraged buyouts (a tendency that gained momentum starting 2003), the high growth rates registered in some sectors, as well as political, legislative and monetary stability.
"I believe highly experienced funds that have gone through such experiences before (global slowdown and various financial crises) will be better positioned to survive and will continue to produce attractive yields," added Emma Popa-Radu.
At present, Advent has three companies in its portfolio: D?fa Deutek (paint, adhesives and mortars), Ceramica Iasi (bricks and metallic tiles) and LaborMed Pharma (generics).
"For each company we invest in we will increase production capacities to generate higher sales for existing products, launch new products and develop on export markets," added Emma Popa-Radu.
On average, Advent's investments in a company are made over a period of 4-5 years and are directed towards the development of capacities, the distribution system, export markets, the building of new production facilities and the consolidation through acquisitions in the country or region.
"We're in various stages of negotiation to seal new acquisitions or consolidate market positions, but we cannot provide any details. We are very interested in investing in Romania and to this end we've added an investment manager with 8 years' experience in private equity to our team and by yearend another person will join us," said Popa-Radu.
According to the data provided by the fund's representative, Romania is one of the main countries Advent International has invested in regionally, after the Romanian office opened in 1998.
Advent's portfolio includes players such as Brewery Holding, which was sold in 2000 to Austria's Brau AG, MobiFon/Connex, sold in 2003 to Vodafone, Euromedia and Terapia. In fact, Terapia managed to multiply Advent's money by the highest percentage. Some of the projects of the management team led by Stephen Stead included the launch of 23 products and the acquisition of 2 domestic generic producers.
Advent International
Romania is one of the main countries the fund has invested in regionally, after it opened its office in 1998
At present has 3 companies in its portfolio: D?fa Deutek (paint, adhesives and mortars), Ceramica Iasi (bricks and metallic tiles) and LaborMed Pharma (generics)
Is in various stages of negotiations to seal new acquisitions and consolidate market positions
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