The European private capital market has registered, in recent years, a significant increase in fundraising activity, reaching unprecedented levels, with a high of 170 billion euros in 2022 (30 % more compared to the previous year and 13% above the average number of funds raised in the last 5 years). Growth funds have played a significant role in this growth, attracting considerable capital: in 2022 alone, 200 European growth funds raised 21 billion euros, exceeding the average of the last five years by 42%, according to an Invest Europe report.
This dynamic presents immense opportunities for entrepreneurs and investors in Europe, as growth funds have brought forth fresh prospects and streamlined the establishment and growth of businesses, fostering innovation and driving economic prosperity.
A relatively new category on the Romanian investment market, growth funds focus on identifying and supporting companies with significant growth potential, providing them with capital and the necessary resources to accelerate their expansion and achieve their growth objectives. The growth equity investment profile is specific to a minority shareholder, with an important component of supporting companies to perform, benefiting from such guidance and access to capital.
“Over the years, European growth funds have experienced substantial growth, progressively capturing a larger portion of the total funds raised within European private equity segments. This evolution is starting to resonate in the trends observed in the Romanian market, playing a significant role in supporting entrepreneurs and businesses in Romania. As a growth fund, Agista provides Romanian SMEs with promising growth opportunities through capital investment and, critically, business expertise. This includes optimizing balance sheet structures to enable rapid scaling and local/regional development. By partnering with Agista, entrepreneurs can propel their businesses forward in a sustainable and accelerated manner, creating a significant impact”, says Nicolae Kovacs, CEO of Agista, a growth fund currently undergoing authorization in Romania.
According to specialists, growth funds will play a fundamental role in the coming years in South-Eastern Europe, through:
• Quick access to new markets and customers, enabling portfolio expansion into high-growth potential areas.
• Access to valuable resources, expertise and extensive know-how through the growth fund’s network.
• Fostering innovation and entrepreneurship in the region while promoting collaboration and networking among companies.
In recent years, the European tech industry has dominated the M&A landscape, accounting for 90% of transactions involving private equity. It is followed by the pharmaceutical sector at 81%, business services at 59%, financial services at 41%, retail at 29%, industrial goods and engineering at 26%, energy and utilities at 18%, chemical industry at 18%, construction at 11%, and the automotive sector at 7%. This trend has contributed to the continuous rise of private equity financing in Europe, which is expected to persist according to future forecasts.
On the local market, Agista, together with Impetum Investments, have recently acquired an additional stake in Bittnet Systems, a Romanian group of IT companies listed on the Main Market of the Bucharest Stock Exchange. This increased involvement from Agista reaffirms Bittnet’s status as a key player in education and IT solution integration within the Romanian market, acknowledging the company’s potential to drive the digital transformation in Romania.
A Romanian growth investment fund in the process of authorization, Agista operates as a minority shareholder with the aim of propelling local SMEs forward through capital infusion, know-how, and access to a thriving business ecosystem within the Impetum Group. While Agista can invest across various industries, its primary focus lies in IT&C, health, recycling, and specialized agriculture. Up to date, Agista has made investments in companies such as Chromosome Dynamics, Eplus Smart Energy, Dendrio Solutions, GRX (now FORT), Top Tech and Bittnet Group.
Source: AGISTA Research, Invest Europe: Investing in Europe PE Activity Report 2022 and Mordor Intelligence: Europe Private Equity Market Report
