Portfolio.hu: What is the main geographical investment focus of Euroventures, and what is its strategy?
Thomas Howells: The Central European region with a focus on Hungary where our advisory team is based is our main geographical focus. The funds we advise invest up to EUR8 million on each transaction, primarily in expansion, development, late stage and buy-out investments in companies operating in the countries of Central and Eastern Europe.
Portfolio.hu: How have leveraged buyout transactions been affected by recent developments in the financial markets both globally and in the CEE region?
Thomas Howells: Globally there are a number of transactions on hold, but this does not apply to anything we at Euroventures are currently involved in. It is too early to predict what the impact on CEE will be, but it maybe naive to imagine that the conditions experienced in the west will not also apply here.
Portfolio.hu: Will this trigger bankruptcies in the private equity market?
Thomas Howells: General economic growth is a lender's best friend, with time it can make even fairly dubious lending decisions turn out alright. As CEE has and will continue to have higher growth than Western Europe the risk of lending default on over-leveraged private equity deals is probably less in CEE.
Portfolio.hu: How will the possible liquidation of assets affect valuation levels?
Thomas Howells: It is too early to predict many liquidations, but a reduction in the availability of debt - which will be a fact of the future Private Equity leverage market - will in itself reduce valuation levels.
Portfolio.hu: How do you see the private transactions in the mid-size M&A segment in the CEE region?
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To read the rest of this Q&A, including discussion of Hungarian equity valuations, please click here for Portfolio.hu