1 / 18

Adam Smith 4 th Annual Ukrainian Investment Summit London, UK March 11, 2008

Adam Smith 4 th Annual Ukrainian Investment Summit London, UK March 11, 2008. Leading private equity firm in the Region. RUSSIA. BELARUS. UKRAINE. MOLDOVA. HORIZON CAPITAL. GEOGRAPHIC FOCUS.

liana
Download Presentation

Adam Smith 4 th Annual Ukrainian Investment Summit London, UK March 11, 2008

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Adam Smith 4th Annual Ukrainian Investment SummitLondon, UKMarch 11, 2008

  2. Leading private equity firm in the Region RUSSIA BELARUS UKRAINE MOLDOVA HORIZON CAPITAL GEOGRAPHIC FOCUS • Horizon Capital is the leading private equity fund manager in Ukraine, Moldova and Belarus, managing three funds: • EEGF II – $300 million target • EEGF I – $132 million • WNISEF – $150 million • Over 13 years of investment experience in the region • Entrepreneurial team of professionals with long common track record • Superior network of relationships creates pipeline and due diligence value In 2008, Horizon Capital launched Emerging Europe Growth Fund II (EEGF II) with a target of $300 million. EEGF II will focus on mid-cap companies in fast growing sectors of Ukraine and the region. Investment size is expected to range from $15-30 million per deal. HC INVESTMENTS UKRAINE FDI BELARUS BELARUS

  3. Per Capita Disposable Income, $ 7,000 6,000 Poland ’03-’08 CAGR=12% 5,000 Russia ’03-’08 CAGR=24% 4,000 3,000 Belarus ’03-’08 CAGR=22% 2,000 Ukraine ’03-’08 CAGR=32% 1,000 Moldova ’03-’08 CAGR=18% 0 2003 2004 2005 2006e 2007f 2008f (base year = 2003) Source: Euromonitor Statistics/ Country Fact sheet

  4. Per Capita Cumulative Direct Investment, $ 2,000 1,500 1,000 500 0 Belarus Moldova Ukraine Russia Poland 19% CAGR 2,088 Year 2006 Year 2000 36% CAGR 43% CAGR 722 23% CAGR 601 15% CAGR 435 306 253 112 94 88 50 Source: IMF, Balance of Payments database (except for Russia) World Investment Report, UNCTAD (for Russia only) EBRD country statistics

  5. GDP Growth Comparison 2000-2006 15% 10% 5% 0% Ukraine Moldova Belarus Russia Poland GDP (PPP) CAGR ’00-’06 11% 10% 9% 9% 6% Source: International Monetary Fund, World Economic Outlook Database, October 2007

  6. Consumer Bank Loans, $ per capita 500 400 Ukraine=97% 300 Russia=121% Poland=79% 200 China*=28% 100 India=33% 0 2002 2003 2004 2005 2006 CAGR 02-06: * Note: CAGR for China is 2002-2005 Source: National Bank of Ukraine, Central Bank of Russia, National Bank of Poland, The People’s Bank of China, Reserve Bank of India

  7. M&A Banking

  8. M&A Other Sectors

  9. M&A Activity in CEE in 2006 M&A Activity in CEE 2006 • Extremely active market: +2,500 transactions; 12% of European market, $163 billion • M&A activity doubled over 2005; tripled 2004 value • Top 3 countries by value: Russia, Czech Republic, Poland • Top 3 growth countries by volume: Ukraine, Russia, Slovakia • Top 3 growth countries by value: Croatia, Hungary, Russia • Top 3 investors in region: UK, Germany, US • Proportion of deals ↓ $100 mn: 82% • Average deal size of deals ↓ $100 mn: $20 mn. Source: PricewaterhouseCoopers CEE M&A Survey 2006

  10. M&A Activity in CEE in 2006 • Top target industries: manufacturing, financial services, food & beverages, utilities • Total value of privatizations down – much of CEE is more mature • Investment flows moving east: 75% of financial services transactions (397) closed were in Russia, Ukraine, Serbia, Bulgaria Source: PricewaterhouseCoopers M&A Survey 2006

  11. Private Equity in CEE • Since 1990 €9 bn. raised specifically for CEE (excluding Ukraine, Russia) • Annual investment levels exceeding €550 mn. • Private equity investments across CEE totaled €508 mn. in 2005 • More than 85% of activity concentrated in Hungary, Czech Republic, Poland, Romania • On average private equity investment is equivalent to 7% of GDP (in contrast to Europe on the whole ~40%) Source: EVCA Special Paper, Central and Eastern Europe Statistics 2005 EVCA Symposium, June 2006

  12. Private Equity in CEE • Buyout largest category and increasing in 2005 • Together buyouts and replacement capital 72% of value, similar to Europe as a whole • Expansion capital deals over 2% (higher than in Europe) • Starting and seed deals under 2% (lower than in Europe) • Leverage becoming ever more available Source: EVCA Special Paper, Central and Eastern Europe Statistics 2005 EVCA Symposium, June 2006

  13. Private Equity in CEE • Exit activity (measured by cost of investment) ↑ 244% over 2004 • Public market exits ↑ 70% over 2004 • Secondary sales to other private equity houses not yet significant • Poland largest exit market, 25% of total activity Source: EVCA Special Paper, Central and Eastern Europe Statistics 2005 EVCA Symposium, June 2006

  14. Shostka – Leading Producer of Hard Cheeses • Buyout followed by infusion of growth capital • Low entry multiple (2.5x EBITDA) • Executed plan to grow aggressively while improving brand and distribution • Exit at 5.9x cash on cash and over 470% IRR

  15. IMB Group – Pure Play Consumer Lending Platform • Identified growth area – started mortgage bank • Created expansion opportunity – management spin-out of leading consumer intermediary • Attracted high quality, experienced management and Non-Executive Board Chairman • Private placement in July 2006 attracted $31.5 mn. for a 46% equity stake – 6x NAV pre-money • Completed $100 mn. equity increase in June 2007 for a 38% equity stake – 6x NAV pre-money

  16. Ergopack – Market Leader Manufacturer of Household Disposables • Identified under penetrated growth area – non-food consumer spending • Improved transparency enabling access to credit • Provided capital for new manufacturing site and recycling center – cost savings created • Growing 50% year on year • Product line extensions next step

  17. What Does the Future Hold? • ↑ Fundraising for the region • ↑ Competition • ↑ Average enterprise value • ↑ Buyouts/controlling stakes • ↑ Use of leverage • ↑ IPO’s • ↑ Secondary purchases • ↓ Holding periods

  18. Contact Information Natalie A. Jaresko, Managing Partner 4 Muzeyny Provulok, 3rd Floor 01001 Kyiv, Ukraine Tel.: +38 044 490-5580 Fax: +38 044 490-5589 njaresko@horizoncapital.com.ua www.horizoncapital.com.ua

More Related