Integration processes as catalyst for private equity and venture capital investment

Abstract

The integration process of national economies opens up a great opportunity for foreign capital inflows into the country. One of the challenges in terms of the growing demand for capital, is to take advantage in the best way of this opportunity to attract institutional investors in the form of private equity and venture capital funds. Namely, almost two decades it is recorded a growth in venture capital market activity in Central and Eastern Europe, while the activities in Serbia regarding the same are unenviable low. There are mainly institutional investors from Western Europe and North America who have invested in the region of Central and Eastern Europe, while a small number of investors are domiciled in the region. In order to stimulate the development of venture investment on the territory of south-eastern Balkans, SEAF (Small Enterprise Assistant Fund) in October 2005. opened a representative office SEAF South Balkan Fund (SBF) in order to place the private equity investor in Serbia, Macedonia and Montenegro. After that, in 2010. the Serbian association for the private equity was formed (SPEA - Serbian Private Equity Association) to promote and attract foreign investors, in form of private equity and venture capital. Among the countries that have so far proved greater amount of investment by venture capital funds in the region are Poland, Hungary, Romania, Slovakia, Ukraine, Croatia and Slovenia. It is reasonable to ask why Serbia has not recognized the possibility of attracting investment through venture capital and private equity. The aim of this paper is, based on analysis of the neighboring countries which have the integration process behind themselves, to answer the question of whether integration processes are a key catalyst to attract this kind of investment in Serbia?.

Keywords

• integration processes
• private equity
• venture capital