Hungarian Venture Capital and Private Equity Association


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  • Hungary is located in the heart of the European continent. Hungary occupies just 1 % of the European continent. Hungary, with its favorable geographical location, is at the crossroads of main commercial routes in Europe. From Hungary, a market of some 240 million people can be reached within 600 miles .
  • Cushman & Wakefield has conducted this survey on Europe’s major business cities each year since 1990. The study examines the issues companies regard as important in deciding where to locate and compares how Europe’s leading business cities perform on each issue. Senior Executives from 507 European companies gave their views on Europe’s leading business cities. Each year we ask companies about their future expansion plans . This map shows the number of companies expecting to locate, within the next five years, in the cities shown.
  • Hungarian Venture Capital and Private Equity Association

    1. 1. Investments in Hungary Past, present and future László OLÁH President, HVCA 9 th November, 2007
    2. 2. Hungary Land: 93,030 km² Population: 10,1 million GDP/capita, at PPP: EUR 1 6 , 040 Hungary in Europe
    3. 3. Hungary in 2006 <ul><li>Size of the country: </li></ul><ul><ul><li>93,030 km2 </li></ul></ul><ul><li>Population: </li></ul><ul><ul><li>10.1 million </li></ul></ul><ul><li>Main macroeconomic indicators: </li></ul><ul><ul><li>GDP at PPP : EUR bn 161 . 5 </li></ul></ul><ul><ul><li>CPI: 3. 9 % </li></ul></ul><ul><ul><li>Unemployment rate: 7. 5 % </li></ul></ul><ul><ul><li>FDI stock per capita: EUR 6 , 170 </li></ul></ul>Sector information: Basic country information S ources: Hungarian Central Statistical Office, CIA World Factbook, Economist Intelligence Unit , BA-CA Economic Research, WIIW
    4. 4. New FDI projects, top recipient countries, 2005 / 06 Hungary ranked 13 in the number of FDI projects in the world receiving almost 2% of all investment projects Source: EIU, World Investment Prospects to 2011
    5. 5. Hungary is a favoured FDI target Source: WIIW, national banks, end of 200 6 FDI stock per capita , 2006 Capital attraction
    6. 6. Hungary will keep its first place in FDI / capita in the region FDI/capita in USD, 2007-2011 Source: EIU
    7. 7. Still leading the way <ul><li>A recent study by University of Navarra found Hungary the most attractive country in CEE for venture capital and private equity investors. </li></ul><ul><li>Hungary especially did well in work force, FDI inflows, stock market, corporate taxation categories . </li></ul>Source: The attractiveness of CEE countries for venture capital and private equity investors
    8. 8. Source: European Cities Monitor, Cushman and Wakefield, 2006 Budapest can expect a strong inflow of companies in the next 5 years Cushmand and Wakefield Europe a n Cities Monitor , 2006
    9. 9. Cumulated FDI* in Hungary in million euros Source: National Bank of Hungary, Ministry of Economy and Transport * Including reinvested earnings from 1995 Hungary is Front-Runner as regards FDI Potential and Performance 62, 818
    10. 10. Source: National Bank of Hungary Annual FDI inflow to Hungary, in million euros
    11. 11. Source: National Bank of Hungary FDI stock by country of origin and industry
    12. 12. Hungary leaps 21 places outranking the Czech Republic, Romania, Bulgaria The world bank recognized Hungary’s reforms in Starting business and Registering property
    13. 13. Hungary Boasts the Lowest corruption in the region Source: Transparency International
    14. 14. Venture Capital and Private Equity - Fundraising 2006 <ul><li>Continuously high capital inflow into the CEE region </li></ul><ul><li>New global or European funds extend their activities into the region </li></ul><ul><li>Regional players are dominant </li></ul>The surveyed 25 funds reported EUR 1 ,162 million raised funds regionally in 200 6
    15. 15. VC/PE Investment Activity 2001-2006 <ul><li>Investment activity increased </li></ul><ul><li>Stable number of large structured transactions </li></ul><ul><li>The low and middle sector of the market still undersupplied by private investors </li></ul><ul><li>Due to the BorsodChem deal the average investment volume is almost three times higher than previous year </li></ul>* The surveyed funds reported 30 investments. Data on four transactions were not disclosed, these deals are not included in the above statistics.    2001 2002 2003 2004 2005 2006 Number of Transactions 28 29 32 41 26* 39 Number of Investe e Companies 27 28 25 35 26 39 Total Invested ( EUR m)  71 127 117 108 131 534 Avg. Invest ment Volume ( EUR m) 2.5 4.4 3.7 2.6 5.0 13.7
    16. 16. VC/PE Investment Activity Investment Stages, 2002 / 06 <ul><li>Relatively large number of early stage transactions represent overall small investment volume but higher than previous years </li></ul><ul><li>Expansion capital is dominant in terms of number of transactions . </li></ul><ul><li>Buyout transactions dominate investment volume </li></ul>
    17. 17. Number of Exits - 2006 <ul><li>There is no relevant change in exit activity </li></ul><ul><li>Trade sale was dominant in amount, Buy back in nu mber </li></ul><ul><li>Sale to another PE firm represents similar ratio as in more developed markets </li></ul><ul><li>Buy backs are dominated by the government backed investors’ strategy </li></ul><ul><li>Public markets provided exit opportunities again (but not on BSE) </li></ul>*The surveyed funds reported 18 exits. 6 exits were not disclosed, so these exits are missing from the above statistics. Exit Type Number Trade Sale 5 Sale to another PE firm 3 Sale to management / buy back 13 IPO 1 Write-off 0 Total 22 *
    18. 18. <ul><li>Hungarian Venture Capital and Private Equity Association </li></ul><ul><li> </li></ul><ul><li> </li></ul>Further information