Investing in Greece  (or through Greece) George Kourtis President, HVCA Partner, Global Finance 7 th  Venture Capital Foru...
VC and PE in Greece and the Region <ul><li>Greek Venture Capital & Private Equity industry has been active in Greece and t...
Greek VC industry map <ul><li>Far from being a mature industry, Hellenic Venture Capital Association (HVCA) has 15 members...
Supply-demand of Capital in Greece Incubators VC & PE TANEO-Backed VCs Greek PE
…  to cover the existing gap <ul><li>…  of financing between Incubators and VC Funds at the riskiest part of the market </...
Invest in Greece  <ul><li>Stable economic and political background, solid continued growth of GDP (mainly consumption-driv...
Opportunities still exist … <ul><li>Absence of IPO market in ASE </li></ul><ul><li>Growing Interest Rates </li></ul><ul><l...
Greece and the Regional Prospects  <ul><li>Greek companies have been very active in the Region since early ’90s (when few ...
Investing through Greece … <ul><ul><li>Early investors in the region were caught in the rough years: instability, financia...
<ul><li>PE & VC Funds can provide the financing for companies expanding abroad since there is: </li></ul><ul><ul><li>Limit...
Thank you  George Kourtis President, HVCA Partner, Global Finance
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Investing in Greece (or through Greece)

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Investing in Greece (or through Greece)

  1. 1. Investing in Greece (or through Greece) George Kourtis President, HVCA Partner, Global Finance 7 th Venture Capital Forum June 2006
  2. 2. VC and PE in Greece and the Region <ul><li>Greek Venture Capital & Private Equity industry has been active in Greece and the South East European Region since early ‘90s </li></ul><ul><ul><li>Some size; with successful investment track record </li></ul></ul><ul><ul><li>Opportunities in Greece but also difficulties in business environment </li></ul></ul><ul><li>From Greece but active in the Region: </li></ul><ul><ul><li>Romania, Bulgaria, FYROM, Albania, Serbia (but also Russia, Ukraine and CEE countries) </li></ul></ul><ul><ul><li>With or without VC funding, Greek companies invest abroad </li></ul></ul><ul><li>With stable (politically and economically) Greece, VC & PE may find in the Region </li></ul><ul><ul><li>Business growth for existing Greek portfolio companies or </li></ul></ul><ul><ul><li>New, local investment opportunities, </li></ul></ul><ul><ul><li>in a high growth environment with lower (than in recent past) risk profile </li></ul></ul>
  3. 3. Greek VC industry map <ul><li>Far from being a mature industry, Hellenic Venture Capital Association (HVCA) has 15 members, all the industry participants: </li></ul><ul><ul><li>Five P rivate E quity firms </li></ul></ul><ul><ul><ul><li>Leveraged Buyouts - majorities, </li></ul></ul></ul><ul><ul><ul><li>Large growth deals, pre-IPO - minorities </li></ul></ul></ul><ul><ul><li>Six V enture C apital firms </li></ul></ul><ul><ul><ul><li>Early-stage, minorities </li></ul></ul></ul><ul><ul><ul><li>Expansion capital deals, small-medium size companies </li></ul></ul></ul><ul><ul><li>Three Incubators </li></ul></ul><ul><ul><li>One fund-of-funds (TANEO, state controlled) </li></ul></ul><ul><li>Five controlled by Banks and nine independent </li></ul><ul><li>Total Size of Industry currently under management est imated at € 1.50 billion – about half available for investment </li></ul>
  4. 4. Supply-demand of Capital in Greece Incubators VC & PE TANEO-Backed VCs Greek PE
  5. 5. … to cover the existing gap <ul><li>… of financing between Incubators and VC Funds at the riskiest part of the market </li></ul><ul><li>Digital Leap Fund: state sponsored VC Fund (Information Society) </li></ul><ul><ul><li>Size: € 100 M VC Fund </li></ul></ul><ul><ul><li>To finance SME, ICT companies during early-stage </li></ul></ul><ul><ul><li>Expect to invest in 30-50 companies in next two years and hoping to create a long-lasting leveraging effect on current and new ICT companies and Innovation </li></ul></ul><ul><li>Mid-term benefit: financing of better companies will provide quality ICT deal flow for VC Funds in 3-4 years </li></ul><ul><li>Long-term benefit: for the whole Greek economy </li></ul>
  6. 6. Invest in Greece <ul><li>Stable economic and political background, solid continued growth of GDP (mainly consumption-driven), improving macros, inflation under control </li></ul><ul><li>Good infrastructure (highways, telecom networks etc.) </li></ul><ul><li>Government initiatives to boost activity: PPPs ( ΣΔΙΤ) , privatizations </li></ul><ul><li>Positive VC legal framework (AKES) </li></ul><ul><li>but also … </li></ul><ul><li>Large part of economy still owned or controlled or greatly influenced by the State </li></ul><ul><li>Service-mainly economy; large importer of goods </li></ul><ul><li>Small entrepreneurial appetite for risk </li></ul><ul><li>Complex tax and legal environment limiting activity and sectors (i.e. “basic shareholder”) </li></ul><ul><li>Greek Pension Funds not allowed to invest in VC & PE Funds </li></ul>
  7. 7. Opportunities still exist … <ul><li>Absence of IPO market in ASE </li></ul><ul><li>Growing Interest Rates </li></ul><ul><li>Less risk-taking Banks (Basel II, consumer credit preference) </li></ul><ul><li>Insignificant corporate venturing (after the “bubble years”) </li></ul><ul><li>Maturity in most (traditional) sectors but also, </li></ul><ul><li>Emergence of new business models </li></ul><ul><li>CREATE OPPORTUNITIES FOR THE </li></ul><ul><li>VC & PE INVESTOR IN GREECE </li></ul>
  8. 8. Greece and the Regional Prospects <ul><li>Greek companies have been very active in the Region since early ’90s (when few Western European dared to enter) and still dominate FDI in some countries: </li></ul><ul><ul><li>accumulated FDI exceeds € 7 billion </li></ul></ul><ul><ul><li>biggest investor in Albania, FYROM and Serbia, #2 in Bulgaria and #3 in Romania => created more than 200K new jobs </li></ul></ul><ul><ul><li>Various sectors; banking, telecoms, textiles, trade, retail etc. </li></ul></ul><ul><li>Many Greek companies consider the Region as part of their natural growth expansion business ground (thus securing jobs in Greece) </li></ul><ul><ul><li>New markets with ever growing consumer needs with young population and good education systems </li></ul></ul><ul><ul><li>Lower cost structure in order to remain competitive </li></ul></ul>
  9. 9. Investing through Greece … <ul><ul><li>Early investors in the region were caught in the rough years: instability, financial crises, unregulated markets </li></ul></ul><ul><ul><li>The Region now is the most dynamically growing part of Europe with lower risk profile: </li></ul></ul><ul><ul><ul><li>Bulgaria, Romania entering the EU soon </li></ul></ul></ul><ul><ul><ul><li>GDP growth 50% to 100% higher than Greece, 4x EU avg </li></ul></ul></ul><ul><ul><ul><li>Tamed inflation; macroeconomics in better shape; low foreign debt </li></ul></ul></ul><ul><ul><ul><li>Simple and low tax environment (Bulgaria 15%, Romania 16%) </li></ul></ul></ul><ul><ul><li>Greece can become the gateway to South Eastern Europe and Turkey for international as well as for Greek companies with: </li></ul></ul><ul><ul><ul><li>Large local market and </li></ul></ul></ul><ul><ul><ul><li>The Region a growth upside </li></ul></ul></ul>
  10. 10. <ul><li>PE & VC Funds can provide the financing for companies expanding abroad since there is: </li></ul><ul><ul><li>Limited liquidity in local Equity markets </li></ul></ul><ul><ul><li>Local capital is not abundant </li></ul></ul><ul><ul><li>Taking risks is part of their day-to-day business… </li></ul></ul>… Private Equity and Venture Capital
  11. 11. Thank you George Kourtis President, HVCA Partner, Global Finance
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