Limited Partners' Perceptions of the Central Eastern European Venture Capital and Private Equity Market

33 Pages Posted: 16 Dec 2008

See all articles by Alexander Peter Groh

Alexander Peter Groh

EMLYON Business School

Heinrich Liechtenstein

University of Navarra - IESE Business School

Miguel Angel Canela

University of Barcelona - Faculty of Mathematics

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Date Written: January 7, 2008

Abstract

Growth expectations and institutional settings in Central Eastern Europe are considered favorable for the establishment of a vibrant venture capital and private equity market. Despite this, there is a lack of risk capital. We examine the obstacles to institutional investments in the region through a questionnaire addressed to (potential) limited partners worldwide. The respondents provide information about their perceptions of the region. Protection of property rights is the dominant concern, followed by social criteria such as the belief in the quality of local managers, and the small size and low liquidity of the Central Eastern European capital markets. However, limited partners regard the growth expectations as attractive and those with exposure in Central Eastern Europe are satisfied with the historical risk and return ratio. They have a good knowledge of the region, are attracted by other emerging regions, and appreciate Central Eastern Europe's entrepreneurial opportunities and local general partners. Overall, the region is ranked very favorably compared to other emerging regions, especially with respect to its economic and entrepreneurial activity.

Keywords: Venture Capital, Private Equity, CEE, International Asset Allocation, Institutional Investors

JEL Classification: F3, G23, G24, P2

Suggested Citation

Groh, Alexander Peter and Liechtenstein, Heinrich and Canela, Miguel Angel, Limited Partners' Perceptions of the Central Eastern European Venture Capital and Private Equity Market (January 7, 2008). IESE Business School Working Paper No. 727. Available at SSRN: https://ssrn.com/abstract=1316764 or http://dx.doi.org/10.2139/ssrn.1316764

Alexander Peter Groh

EMLYON Business School ( email )

23 Avenue Guy de Collongue
Ecully, 69132
France

Heinrich Liechtenstein (Contact Author)

University of Navarra - IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

Miguel Angel Canela

University of Barcelona - Faculty of Mathematics ( email )

Barcelona, 08007
Spain

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