EMPEA Insight: CEE/CIS

Capital commitments for private equity in CEE and CIS steadily increased from US$2.2 billion in 2003 to an outlier US$14.6 billion raised in 2007. Private equity investors are increasingly finding opportunities in markets throughout the region, with the Baltic countries and Southeastern Europe emerging as the next frontiers.

The inclusion of Russia among the BRICs obscures the distinctiveness of the Russian pri­vate equity market, over a decade in the making. While Russia continues to draw the bulk of investment within the CIS markets, remarkable economic growth in the markets of Ukraine and Kazakhstan is encouraging investors to broaden their scope within the CIS. Perceptions about investment risk in CEE and CIS markets have improved. But the no­tion that Accession in the CEE markets translates to uniform harmonization with EU stan­dards is misplaced. Enforcement of legal protections and treatment of investors still var­ies from country by country.

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