hungarian venture capital and private equity association
TRANSCRIPT
Hungarian Venture Capital and
Private Equity Association
Investments in HungaryPast, present and future
László OLÁHPresident, HVCA
9th November, 2007
Hungarian Venture Capital and Private Equity Association
HungaryHungary
Land: Land: 93,030 km²93,030 km²Population: 10,1 millionPopulation: 10,1 millionGDP/capita, at PPP: EUR GDP/capita, at PPP: EUR 1166,,040040
Hungary in Europe
Hungarian Venture Capital and Private Equity Association
Employment by Main Activities
4,8%
32,3%
62,8%
Agriculture
Industry
Services
Major exports
1,9%2,5%5,5%
27,6%
62,4%
Machinery & Equipment
Other manufactures
Food, beverages & tobacco
Raw materials
Others
Hungary in 2006
Size of the country:
93,030 km2
Population:
10.1 million
Main macroeconomic indicators:
GDP at PPP: EUR bn 161.5
CPI: 3.9%
Unemployment rate: 7.5%
FDI stock per capita: EUR 6,170
Sector information:
Basic country information
GDP by economic sectors
70%
4%
21%
5%
Agriculture
Industry
Construction
Services
Sources: Hungarian Central Statistical Office, CIA World Factbook, Economist Intelligence Unit, BA-CA Economic Research, WIIW
Hungarian Venture Capital and Private Equity Association
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
Hungarian Venture Capital and Private Equity Association
Hungary is a favoured FDI target
Source: WIIW, national banks, end of 2006
FDI stock per capita, 2006
Capital attraction
FDI Stock per capita in EUR
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
Poland Slovakia Slovenia CzechRepublic
Hungary
Hungarian Venture Capital and Private Equity Association
0
2000
4000
6000
8000
10000
12000
B CZ H PL RO SK
2007
2008
2009
2010
2011
Hungary will keep its first place in FDI/capita in the
region
FDI/capita in USD, 2007-2011
Source: EIU
Hungarian Venture Capital and Private Equity Association
Still leading the way
A recent study by University of Navarra found Hungary the most attractive country in CEE for venture capital and private equity investors.
Hungary especially did well in work force, FDI inflows, stock market, corporate taxation
categories.
Source: The attractiveness of CEE countries for venture capital and private equity investors
Hungarian Venture Capital and Private Equity Association
Source: European Cities Monitor, Cushman and Wakefield, 2006
Budapest can expect a strong inflow of companies in the next 5 years
Cushmand and Wakefield
European Cities Monitor, 2006
Hungarian Venture Capital and Private Equity Association
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
05 000
10 00015 00020 00025 00030 00035 00040 00045 00050 00055 00060 00065 000
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Q12007
62,818
Hungarian Venture Capital and Private Equity Association
Source: National Bank of Hungary
Annual FDI inflow to Hungary, in million euros
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
3500
4000
4500
5000
5500
6000
6500
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
equity capital reinvested earnings total FDI inflow
Hungarian Venture Capital and Private Equity Association
9%
10%
11%
16%
10%
24%
9%
11%
Transport equipment
Electrical and opticalequipmentOther manufacturing
Trade, repair ofvehiclesReal estate andbusiness activitiesFinancialintermediationTransport andcommunicationOther
Source: National Bank of Hungary
FDI stock by country of origin and
industry
2%2%
2%2%
2%
2%3%
4%
4%
5%
7% 11%
14%
27%13%
Germany
Netherlands
Austria
UK
France
USA
Luxembourg
Norway
Finland
Belgium
Spain
Switzerland
Italy
Japan
Other
Hungarian Venture Capital and Private Equity Association
Hungary leaps 21 places outranking the Czech Republic, Romania, Bulgaria
Th
e wo
rld b
ank reco
gn
ized H
un
gary’s
reform
s in S
tarting
bu
siness an
d
Reg
istering
pro
perty
Hungarian Venture Capital and Private Equity Association
Hungary Boasts the Lowest corruption in the region
0 5 10
New-Zealand (1)
Denmark (1)
Finland (1)
…
Hungary (39)
Czech Republic (41)
Slovakia (49)
Poland (61)
…
Somalia (179)
Myanmar (179)
Source: Transparency International
Hungarian Venture Capital and Private Equity Association
Venture Capital and Private Equity - Fundraising 2006
Continuously high capital inflow into the CEE region
New global or European funds extend their activities into the region
Regional players are dominant
The surveyed 25 funds reported EUR 1,162 million raised
funds regionally in 2006
Hungarian Venture Capital and Private Equity Association
VC/PE Investment Activity 2001-2006
Investment activity increased
Stable number of large structured transactions
The low and middle sector of the market still undersupplied by private investors
Due to the BorsodChem deal the average investment volume is almost three
times higher than previous year
* 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 Investee Companies 27 28 25 35 26 39
Total Invested (EUR m) 71 127 117 108 131 534
Avg. Investment Volume (EUR m) 2.5 4.4 3.7 2.6 5.0 13.7
Hungarian Venture Capital and Private Equity Association
VC/PE Investment Activity Investment Stages, 2002/06
Relatively large number of early stage transactions represent overall small investment volume but higher than previous years
Expansion capital is dominant in terms of number of transactions. Buyout transactions dominate investment volume
Number of transactions
3 4 1 1
1219 27
1920
14
9
13
6
16
30
5
10
15
2025
30
35
40
45
2002 2003 2004 2005 2006
Buyout Expansion Early stage
Volume of transactions
23100
506
7830
23
84 82
39 32
4
14 4 7
-
100
200
300
400
500
600
2002 2003 2004 2005 2006
Buyout Expansion Early stage
Hungarian Venture Capital and Private Equity Association
Number of Exits - 2006
There is no relevant change in exit activity Trade sale was dominant in amount, Buy back in number Sale to another PE firm represents similar ratio as in more developed
markets Buy backs are dominated by the government backed investors’ strategy Public markets provided exit opportunities again (but not on BSE)
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*
*The surveyed funds reported 18 exits. 6 exits were not disclosed, so these exits are missing from the above statistics.
Hungarian Venture Capital and Private Equity Association
Hungarian Venture Capital and
Private Equity Association
E-mail:[email protected]
www.hvca.hu
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