Alternative Investment Funds
Southeast Europe: the region with vast potential for the Alternative Investment Funds industry
Average GDP growth 2020-2023 in SEE 2,85% p.a. (vs. 0,95% for Core EU)
Expected GDP growth 2024-2028 in SEE 3,15% p.a. (vs. 1,55% for Core EU)
Government Debt / GDP in 2023: 54% (SEE) vs. 80% (Core EU) vs. 83% (EU)
Frontier Market to Emerging Market transition case (Romania example) to be followed by other markets
As seen from the graph below, the entire CEE region still has low private equity penetration (alternative investment funds) compared to the rest of Europe. However, considering that the majority of these investments are concentrated in the Polish and Czech markets (which are not part of SEE), the PE penetration of the SEE region versus core EU is truly marginal.
SOURCE: Invest Europe –2022 Central & SOUTHEAST EUROPE Private Equity Statistics, World Bank, Preqin, Mideuropa analysis
As a strong believer in disciplined investment and pricing approaches, I adhere to value investing and focus on core-skillset industries and sectors, applying conservative use of leverage. I advocate for a deep understanding of the most successful international playbook models when assessing the future potential of a regional investment opportunity. Committed to the “protecting the downside” investment rationale, I am an avid advocate of pursuing investments with asymmetrical risk/return profiles—limited downside risk with higher upside potential. As an investment committee member, I offer:
An unbiased and conservative view on the attractiveness of investment opportunities.
A deep understanding of the financial and accounting aspects of portfolio companies' products and services.
Emphasis on the importance of talent management and the quality of executive teams at the portfolio companies' level.
Advocacy for the use of data to create value for the company and shape its future business strategy.
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IC member of ALFI PE and ALFI PE Growth (2019 - ) – AUM 135 mil EUR
With to-date net IRR of 31% and 22% respectively, with TVPI of 2,0x and 1,6x, both PE funds are on a good track to realize targeted MoM multiples of 3,0-times to 4,0-times for their LP base.
As a believer in “earning the trust” with prospective LPs through a clear track record of value creation, humbleness in promises, and the power of “over-delivery”, I am committed to constantly expanding relationships with institutional LPs familiar with the asset class. I am also advocating for strong, continuous relationships with leverage providers, such as banks and private debt providers, to enhance the returns profile of the investment portfolio. As a capital raising expert, I offer:
Clearly articulating the investment narrative
Exemplifying the value of data-driven investment decision making
Showing strong capacity to react quickly on any headwind trends within the portfolio
Exemplifying the domain expertise in the targeted investment strategy sectors
Not taking the credit where there is none to be taken (i.e. positive market developments)
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Supporting capital raising strategy for pioneering PE funds in the South East European region
Blue Sea Capital (2010 – 2011) – first time fund, co-raising money during the times of extreme cash crunch and widespread disbelief in the asset class in the region. Securing entirely HNWI LPs funding as a fund co-founder and core team member. Funds raised 34 mil EUR.
ALFI PE Funds (2017-2018) – first time fund, co-raising money backed by the lessons-learned and ultimate investment strategy logic of protecting the investment downside for future LPs. Funds raised 70 mil EUR. Additional funds taken over 65 mil EUR (GP replacement). Total managed LP funding 135 mil EUR.
Knowledge. Interpreted.
Experienced investment practitioners and prominent books on investment strategies teach us the same: diversification is the magic word for long-term investment gain...
FEATURED
Sep 4, 2024
AIF