Ivan Vohlmuth, a partner with Swiss private equity firm Royalton Partners, says financial assets in Romania are the most expensive in Central and Eastern Europe.
Having entered the local market at the end of last year, following an investment estimated at one million euros in insurance company Certasig, Royalton Partners has ambitious plans on the local market, and wants to invest 50 million euros over the coming two years. The main companies targeted are financial services providers, local businesses, which do not face international competition.
"In Romania, we are looking at projects in the financial services sector. We are willing to invest 50 million euros in financial services in the coming two years. Some of these projects are ongoing, but I cannot say exactly when they will be completed," Ivan Vohlmuth told ZIARUL FINANCIAR.
The company intends to gain control over the company purchased, achievable both by acquiring the majority stake and by appointing one of the partners to the Board of Directors.
Ivan Vohlmuth is vice-chairman of the Board of Directors of Certasig.
"We are interested in acquiring the majority stake in companies, because we want to have control of the business and be responsible for the company's evolution. Holding a minority stake extends the time it takes to bring the company to the desired level," said Vohlmuth.
Although financial assets are attractive, the price of buying into a local financial services company has reached rather high levels, which makes it increasingly difficult for private equity funds to achieve 300% or even 400% yields in three to five years.
"The high price of insurance companies on the Romanian market does not entail proportionate profits for private equity funds. One can also derive reasonable returns by acquiring a company at multiple of four or five times of its turnover, but we would rather start the investment from a lower level," added Vohlmuth.
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