There aren’t many places in the world where private equity professionals would actually go on strike. But then again, there haven’t been many periods in
During the rebellion, hundreds of thousands of Ukrainians flocked to Kyiv to protest against electoral fraud and corruption, and a general strike was called that affected many parts of Ukraine’s society – including the country’s fledging private equity community. Western NIS Enterprise Fund, a $150 million evergreen Ukrainian private equity vehicle, was no exception. “The whole office was on strike, absolutely,” says Natalie Jaresko, the group’s president and CEO.
What was striking about the uprising was the fact that it was predominantly led by the middle classes. “This was not poor versus rich. This revolution was led by shopkeepers demanding a European standard of living,” says Jaresko.
The prospect of gradual liberalisation – part of Yushchenko’s promise to the electorate was to achieve EU accession – coupled with a number of years of significant economic growth makes Jaresko excited about the prospects for private equity in the region.
The Western NIS Enterprise Fund is an evergreen vehicle that to date has invested $95 million in 28 companies in Ukraine and Moldova. Jaresko believes
Jaresko’s fund focuses mainly on growing mainstream business sectors such as fast-moving consumer goods, retail, financial services and leisure/tourism. Moscow-based Delta Private Equity Partners, which recently closed a $120 million direct investment fund with a 10 percent allocation to the country, has a similar industry focus.
Ukraine’s proximity to and historic trading relationship with Russia mean that cross-border investment opportunities are likely to continue to present themselves, particularly in the energy sector.
As a result, now seems a good time for the private equity managers in the region to get back to work. As investment activity gains momentum in the region, funds on the ground are likely to enjoy a head start. Provided the country can maintain a degree of political stability, others will undoubtedly follow them into a country that mesmerised the world for 13 days last year.