Bain & Co’s PE predictions for Central and Eastern Europe

The consultancy giant said that more local limited partners are emerging in the CEE region, with their activity intensifying in the last five years and likely to continue growing over the coming decade.

On the conflict in Ukraine, CEE economies are likely to benefit in the medium term from “vast opportunities to assist with reconstruction and development programs, while the direct impact of the conflict on investment funds’ existing operations has been limited”.

In the venture capital space, the value of investments in CEE is skyrocketing, reaching around €4.1bn in 2021, making CEE the fastest-growing VC market in Europe.

Bain said that as well as a rise in overall funding, the size of investment rounds has also expanded, and CEE is starting to become “one of the most important ecosystems in Europe, with a growing number of local unicorns”.

The report predicts that general partners in the region will see improving fundraising outlook due to better current and future returns on investment.

“CEE economies are growing fast as they continue catching up to the West, fueled by a highly qualified labor force, and investments in nearshoring, infrastructure and the green economy,” said Jacek Poświata, managing partner at Bain & Company Poland/CEE.

Poświata  added: “After developing over the past two decades, PE funds now have all the pieces in place to capitalize on that trend. VC is already booming and we expect this to continue, with investment doubling or tripling over the next four years, based on the trajectories we’ve seen in Western European economies.”

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