Advent International Investment Fund can provide funding between$10 and $20 million for regular investment projects, with thepossibility of attracting limitless resources for the very largecompanies, but few companies in Romania can absorb this kind ofmoney.
"We can easily bring $50-100 million in Romania in case we find atransaction that size.
Our traditional sectors, for which we can also provide expertise,are telecommunications, media, software, electronics, consumergoods, pharmaceuticals, health, but we are also open to companiesin other sectors," Emanuela Popa-Radu, director with AdventInternational Romania, told Ziarul Financiar.
The fund is mainly looking for private, unlisted companies and isless interested in those up for privatisation.
"Privatisation takes a long time to complete, which may become evenlonger if the process is challenged and annulled. We'd ratherinvest in a business, a market share and a management team, insteadof merely buying some assets.
A good situation would be when a management team wants to buy thecompany from the State, because it shows they have the initiative,"Gelu Tudose, director with Advent International Romania,said.
Advent is currently considering two investment projects likely tobe completed this year, but it still has resources available nomatter if the two projects are completed or not.
The fund destined to the Central and Eastern Europe amounts to $200million, with Romania, Hungary and Poland as the main outlets. Ofthis amount, up to 25% could be placed in Romania.
The investments may be supplemented from the global Advent fund,worth one billion dollars, and by raising extra cash from theinvestors of the Advent funds, who can co-invest in the projectsselected.
Advent International usually goes after market leaders, that iscompanies ranking among the top three in their industry or whichhave enough potential to make the top three.
The investment is run for three to five years, while the solutionchosen by the fund to back out of the businesses on the Romanianmarket is to sell the investment to a strategic investor.
Advent International invested in Brewery Holdings in Romania andsold it last fall for over 100% yield in USD. At the same time, thefund holds a minority stake in the MobiFon mobile telephonyoperator and in Euromedia advertising company.
"MobiFon is one of the few Romanian examples that can be listed onthe Stock Exchange," Emanuela Popa-Radu says.
"There are companies positioned on the market, which I do not wantto name here, that do not know what to do with the money we couldgive them or need time to develop businesses.
On the other hand, the business plans are often unconvincing andwe're trying to see whether the managers know in which directionthey should steer the company.
We regard the business plan as means to present business ideas andnot as a condition for the company to get money," EmanuelaPopa-Radu says.
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