“MCI Capital believes that the time is very good to invest and that it is ready for new large investments,” said President Tomasz Czechowicz.
“We believe that the current crisis will be the basis for a market revision of the value and we expect valuation adjustments. We think the time is very good to invest. Considering that we have significant liquidity of our own derived from exits made in recent years (around 810 million PLN at the end of the year), we are ready for new large investments, a good example of which is the recently purchased eSky. These investments should enable MCI to generate attractive rates of return also in the future,” Czechowicz wrote in a letter attached to the annual report.
In the context of Russia’s armed attack on Ukraine, MCI expects, inter alia, over 5% of interest rates in the next two years and, in the next five years, permanently higher interest rates than in the last 10 years.
“At this stage, it is very difficult to predict both its [wars] final resolution and its long-term impact on the global economy and the countries of our region. Below we present a summary of our expectations regarding the macro situation in the region:
– we expect over 5% of interest rates in the next 2 years and in the next 5 years, permanently higher interest rates than in the last 10 years,
– we expect a decrease in the dynamics of economic growth in the next 2 years and an increased inflation,
– we expect an influx of a large group of Refugees / Emigrants from Eastern Europe to PL and CEE, which brings economic opportunities, but also social challenges,
– we expect a decrease in competition on the PE market as a result of reduced substitutive competition of exchanges and extension of the fundraising time for classic PE funds over the next 2 years, which may be an attractive period for new investments in the CEE region, especially in connection with the further transformation of the digital economy and the development of enterprises with ambitions pan-European and global,
– we expect a decline in consumer demand in PL / CEE in 2022, which may be partially compensated by the demand generated by Refugees and Emigration flowing to CEE from Eastern Europe,
– we expect the continuation of the transformation of the economy into the digital economy and the continuation of the development of companies in the area of SaaS, E-commerce, Fintech, which may additionally be stimulated by the transfer of talent and technology companies from Eastern Europe,” said the president.
At the same time, he emphasized that the company’s exposure to Russia and countries affected by the war is very small.
“We are dealing with it only in the MCI.TechVentures Subfund, where MCI is the holder of 49% of investment certificates. Taking into account the valuations of the Subfund’s companies as at March 31, 2022 and taking into account our participation in the Subfund, this influence does not exceed 2.8% of equity. MCI as of December 31, 2021,” he wrote.
MCI Capital is one of the largest technology investment funds in Central Europe.
Source: MCI Capital and iSBnews
