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 With respect to its geographic scope of business, how does Osprey characterize the emerging markets at the moment, in comparison to other economies and, with respect to private equity, opportunities within the economic development of a single country?
Answer: The relevant context for comparison is the Central/South East European region (including Turkey). Venture capital plays a clear role in emerging economies that need capital, particularly where capital markets do not function effectively. Given the limitations of obtaining debt at acceptable conditions following the credit crisis, the timing is right for venture capital in this part of Europe.
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When is the most favorable time for a company to seek a private equity partner and how can the company be prepared for such an event?
Answer: For a company wishing to attract outside private capital, the timing typically is right when the company (a) has excellent growth prospects and (b) doesn’t have sufficient own resources to exploit that opportunity. This makes the company attractive to outsiders and the outsiders necessary to the owner in what should be a “win-win” situation.
The company owner should initiate a search for an investor at least six months in advance, since identification of suitable investors, negotiations and due diligence require ample time. Experience shows that the final price is improved if advisors are used by the company owner. |
Is a stock market listing worthwhile?
Answer: Not necessarily. One of the reasons for listing a company is to be able to raise new capital from an exchange where investors actively buy and sell shares and where the price of a listed company can readily be determined. Due to lack of liquidity and the depressed prices, this is not the case in Romania at present. Therefore, the costs and inconveniences of listing may outweigh the benefits. |
