Advent International Investment Fund can provide funding between $10 and $20 million for regular investment projects, with the possibility of attracting limitless resources for the very large companies, but few companies in Romania can absorb this kind of money.
"We can easily bring $50-100 million in Romania in case we find a transaction that size.
Our traditional sectors, for which we can also provide expertise, are telecommunications, media, software, electronics, consumer goods, pharmaceuticals, health, but we are also open to companies in other sectors," Emanuela Popa-Radu, director with Advent International Romania, told Ziarul Financiar.
The fund is mainly looking for private, unlisted companies and is less interested in those up for privatisation.
"Privatisation takes a long time to complete, which may become even longer if the process is challenged and annulled. We'd rather invest in a business, a market share and a management team, instead of merely buying some assets.
A good situation would be when a management team wants to buy the company 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 to be completed this year, but it still has resources available no matter if the two projects are completed or not.
The fund destined to the Central and Eastern Europe amounts to $200 million, with Romania, Hungary and Poland as the main outlets. Of this 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 the investors of the Advent funds, who can co-invest in the projects selected.
Advent International usually goes after market leaders, that is companies ranking among the top three in their industry or which have enough potential to make the top three.
The investment is run for three to five years, while the solution chosen by the fund to back out of the businesses on the Romanian market is to sell the investment to a strategic investor.
Advent International invested in Brewery Holdings in Romania and sold it last fall for over 100% yield in USD. At the same time, the fund holds a minority stake in the MobiFon mobile telephony operator and in Euromedia advertising company.
"MobiFon is one of the few Romanian examples that can be listed on the Stock Exchange," Emanuela Popa-Radu says.
"There are companies positioned on the market, which I do not want to name here, that do not know what to do with the money we could give them or need time to develop businesses.
On the other hand, the business plans are often unconvincing and we're trying to see whether the managers know in which direction they should steer the company.
We regard the business plan as means to present business ideas and not as a condition for the company to get money," Emanuela Popa-Radu says.
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