Private Equity News Serbia: Latest Developments in the Serbian Private Equity Industry

Private equity in Serbia has been growing steadily in recent years, with investors looking to capture the region's potential as its economy returns to growth. Private equity firms are increasingly turning to Serbia as a destination for investment, attracted by its strategic location, highly skilled workforce, and favourable business environment. The country's accession to the European Union in 2025 is also expected to increase investor interest.

Serbia's private equity market is still relatively small compared to other countries in the region, but it has been growing rapidly in recent years. Private equity firms are active in a range of sectors, including manufacturing, healthcare, and technology. The country's highly skilled workforce and favourable business environment make it an attractive destination for investment, particularly in the technology sector, where there is a growing demand for skilled workers.

As the private equity market in Serbia continues to grow, investors are increasingly looking for new opportunities to invest in the country. With its strategic location, highly skilled workforce, and favourable business environment, Serbia is well-positioned to attract investment from around the world. As the country's economy continues to grow, it is expected that private equity firms will continue to play an increasingly important role in the country's economic development.

Key Takeaways

• Private equity in Serbia is growing steadily, with investors attracted by the country's strategic location and highly skilled workforce.

• Private equity firms are active in a range of sectors, including manufacturing, healthcare, and technology.

• As the private equity market in Serbia continues to grow, investors are increasingly looking for new opportunities to invest in the country.

Overview of Private Equity in Serbia

Private equity in Serbia has been on the rise in recent years, with both domestic and foreign investors showing interest in the country's growing economy. Private equity investments in Serbia have been focused primarily on the financial, consumer goods, and technology sectors.

According to the Serbian Private Equity Association (SPEA), private equity investments in Serbia have been steadily increasing since 2010, with a significant increase in the number of investments in 2018 and 2019. The association works to promote private equity investments in Serbia and to provide support to investors looking to invest in the country.

One of the key advantages of investing in private equity in Serbia is the country's favourable business environment. The Serbian government has implemented a number of reforms aimed at improving the country's investment climate, including tax incentives for investors and a streamlined process for starting a business. In addition, Serbia's strategic location and access to key markets in Europe make it an attractive destination for investors.

Investment in private equity in Serbia has also been driven by the country's growing economy. Serbia has experienced steady economic growth in recent years, with a GDP growth rate of 4.2% in 2019. The country's workforce is highly skilled and educated, with a strong focus on innovation and technology.

Overall, private equity investments in Serbia offer investors an attractive opportunity to invest in a growing economy with a favourable business environment and a highly skilled workforce. With the support of the Serbian Private Equity Association and other investment professionals, investors can find the right opportunities to grow their capital and make a positive impact on the country's economy.

Key Players in Serbian Private Equity

Investors

Serbia has seen a growing interest from international investors in recent years, including private equity firms. Some of the key players in the Serbian private equity market include New Europe Capital, Mid Europa Partners, and SEAF South Balkan Fund. These firms have invested in a range of sectors, including healthcare, IT services, and infrastructure.

Companies

Serbian private equity has seen a number of successful investments in recent years. One notable example is Mid Europa Partners' acquisition of Serbia Broadband, a leading television company in Serbia, for around €175-200 million ($235-269 million). Other successful companies in the Serbian private equity market include Nectar Group, a leading producer of fruit juices and beverages, and Knjaz Milos, a mineral water bottling company.

Organisations

The Serbian Private Equity Association (SPEA) is a key organisation in the Serbian private equity market. SPEA acts as an advocate for private equity and venture capital and is a forum for all firms and professionals active in the Serbian private equity market. The organisation has a number of members, including New Europe Capital, Mid Europa Partners, and SEAF South Balkan Fund.

Vladimir Jelovac is another key figure in the Serbian private equity market. Jelovac is the founder and CEO of the Belgrade-based private equity firm, Raiffeisen Private Equity. He has also served on the board of directors of several companies, including the Serbian IT services company, Saga.

Entrepreneurs are also a key player in the Serbian private equity market. Many entrepreneurs have successfully raised funds from private equity firms to support their businesses. One notable example is the Belgrade-based startup, Nordeus, which raised €17 million ($19 million) in a funding round led by the London-based private equity firm, Atomico.

Overall, the Serbian private equity market is attracting a growing number of investors and entrepreneurs, and is expected to continue to grow in the coming years.

Venture Capital in Serbia

Serbia has seen a rise in venture capital activity in recent years, with several funds and firms established to support startups and businesses with high growth potential. The Serbia Ventures Program, launched by the Innovation Fund, incentivizes private investors, high net worth individuals, and institutions to finance startups with high growth potential by incorporating venture capital funds in Serbia.

One of the earliest venture capital firms in Serbia is South Central Ventures, which was established in 2015. The firm focuses on investing in startups in the Balkans region, including Serbia, and has invested in companies such as Agrivi, a farm management software provider, and Cognism, a sales acceleration platform.

Another notable firm is Serbian Entrepreneurs, which was founded in 2018 and primarily invests in early-stage startups in the Balkans region. The firm has invested in companies such as CarGo, a ride-hailing service, and Grouper, a social app for organizing group events.

In addition to these firms, there are also several growth funds in Serbia that provide later-stage funding to businesses with established revenue streams. One example is the Enterprise Innovation Fund, which was established in 2017 and invests in companies in the IT, healthcare, and energy sectors.

Overall, the venture capital landscape in Serbia is still developing, but there are several funds and firms that are actively supporting the growth of startups and businesses in the region.

Private Equity Funds

Serbia has seen a significant increase in private equity activity in recent years. Several private equity funds have been established in the country, with a focus on investing in small to medium-sized enterprises (SMEs) and start-ups.

SEAF South Balkan Fund

One of the most notable private equity funds in Serbia is the SEAF South Balkan Fund. This fund was established in 2010 and has since invested in a number of companies across the Balkan region. The fund has a focus on investing in SMEs with high growth potential, particularly those in the technology, healthcare, and consumer goods sectors.

SEAF South Balkan Fund has a total capitalization of €21 million and has made investments in several Serbian companies, including Danube Foods Group, a leading dairy and meat producer in the country. The fund has also invested in companies in other Balkan countries, such as Montenegro and North Macedonia.

Other Notable Funds

Aside from SEAF South Balkan Fund, there are several other notable private equity funds operating in Serbia. These include:

• Serbian Private Equity Association (SPEA) - founded in 2010 with the aim of raising awareness about private equity and venture capital in Serbia. The association is not currently active, but its website boasts 20 members, including local and international private equity firms.

• Western Balkans Private Equity Fund - a regional fund that invests in SMEs across the Western Balkans, including Serbia. The fund has a focus on investing in companies in the technology, healthcare, and renewable energy sectors.

• Mid Europa Partners - a private equity firm that focuses on investing in companies in Central and Eastern Europe, including Serbia. The firm has invested in several Serbian companies, including Danube Foods Group and SBB, a leading cable and broadband provider in the country.

Overall, private equity funds have become an increasingly important source of financing for SMEs and start-ups in Serbia. With a growing number of funds operating in the country, the private equity industry is expected to continue to play a significant role in driving economic growth and development in Serbia.

Investment Opportunities and Strategies

Private equity firms in Serbia are presented with numerous investment opportunities in various sectors, thanks to the country's favourable business environment and ongoing economic reforms. The government's efforts to improve the investment climate have attracted significant foreign direct investment, which has further opened up opportunities for private equity investors to tap into.

New opportunities are emerging in sectors such as healthcare, technology, and renewable energy, which are expected to grow rapidly in the coming years. Private equity firms can take advantage of these opportunities by investing in innovative startups and established companies in these sectors.

Exit strategies are also an important consideration for private equity firms in Serbia. A well-planned exit strategy can help to maximise returns and minimise risks. Some of the common exit strategies used by private equity firms in Serbia include initial public offerings (IPOs), trade sales, and secondary buyouts.

In addition to identifying new investment opportunities and exit strategies, private equity firms in Serbia must also focus on tapping into the right sources of capital. This may involve raising funds from institutional investors, high-net-worth individuals, or family offices. It is important to ensure that the sources of capital align with the firm's investment strategy and goals.

Private equity firms in Serbia can also benefit from adopting a long-term investment approach. This involves investing in companies with strong growth potential and providing them with the necessary resources and support to achieve their goals. By taking a long-term view, private equity firms can build strong partnerships with portfolio companies and create value over the long term.

Overall, private equity firms in Serbia have a range of investment opportunities and strategies available to them. By staying informed about market trends and adopting a strategic approach, private equity firms can maximise returns and create value for their investors.

Regulation and Legal Framework

Private equity investments in Serbia are subject to a range of regulatory requirements and legal frameworks. The National Bank of Serbia (NBS) is the central bank and regulator of the Serbian financial sector. The NBS is in charge of prudential supervision and regulation of banks, as well as insurance.

The Capital Market Act introduced an EU Directive 2004/39/EC on markets in financial instruments (MiFID) in Serbia. The Belgrade Stock Exchange is the sole stock exchange licensed by Serbian Securities and Exchange Commission (SEC) that operates both a regulated market and a MTF (Belex MTP). The Act aims to transpose as many concepts as possible from the EU Directive.

Private equity firms and investors must comply with Serbian laws and regulations related to foreign investment. Serbia has implemented several laws to facilitate foreign investment, including the Law on Foreign Investments and the Law on Privatization. The Law on Foreign Investments provides incentives to foreign investors, such as tax exemptions and other benefits.

Serbia has also implemented intellectual property rights laws to protect the rights of investors. The Law on Trademarks and the Law on Patents are two key pieces of legislation that govern intellectual property rights in Serbia. These laws provide protection for trademarks, patents, and other forms of intellectual property.

M&A advisory firms and lawyers play an important role in the private equity industry in Serbia. These firms provide advice and guidance to investors on legal and regulatory matters related to private equity investments. They also assist in the negotiation and structuring of private equity deals.

Overall, the regulatory and legal framework for private equity investments in Serbia is well established and provides a stable environment for investors. Private equity firms and investors must comply with Serbian laws and regulations related to foreign investment, intellectual property rights, and other regulatory requirements. M&A advisory firms and lawyers play an important role in facilitating private equity investments in Serbia.

Intellectual Property in Serbia

Serbia has made significant progress in developing its intellectual property (IP) legal framework in recent years. The Intellectual Property Office of the Republic of Serbia (IPOS) is responsible for managing IP rights in the country, and it works closely with the European Patent Office to ensure that Serbia's IP laws are in line with EU standards.

One of the most important recent developments in Serbia's IP landscape was the amendment of the country's patent law in 2022. The amendments brought Serbia's law into line with EU Regulation No. 2019/933, which allows companies in Serbia to produce generic or biosimilar versions of SPC-protected medicines under certain conditions. This change is expected to have a significant impact on the pharmaceutical industry in Serbia, as it will allow local companies to compete more effectively with multinational firms.

Another important area of IP law in Serbia is copyright and related rights. In 2023, a new Law on Copyright and Related Rights was introduced, which aims to modernise Serbia's copyright laws and bring them into line with EU standards. The law includes provisions on digital rights management, collective management of rights, and the protection of performers' rights.

Serbia's IP laws also cover trademarks, designs, and geographical indications. The country has a well-established system for registering trademarks and designs, and IPOS provides a range of services to help businesses protect their IP rights. In addition, Serbia has a number of geographical indications, including "Serbian plum brandy" and "Pirot carpet," which are protected under national and EU law.

Overall, Serbia has made significant progress in developing its IP legal framework in recent years, and the country's laws are now broadly in line with EU standards. However, there is still work to be done to ensure that Serbia's IP laws are fully enforced and that businesses are able to protect their IP rights effectively.

Employment and Commercial Aspects

Private equity firms have been instrumental in creating jobs and boosting employment in Serbia. According to a report by Invest Europe, private equity-backed companies in Europe created over 250,000 jobs in 2018-19, growing more than six times faster than the European average. This trend is also reflected in Serbia, where private equity investment has led to increased job creation in the country's private sector.

In addition to employment, private equity investment has also had a significant impact on the commercial aspects of Serbia's economy. The stability of Serbia's economy and the confidence of consumers and investors have been preserved despite the multidimensional crisis that has lasted for over three years, as evidenced by the record inflows of FDI and continued growth of employment and wages in the private sector, among other indicators.

The Serbian Private Equity Association (SPEA) has been at the forefront of promoting private equity investment in the country. The association provides a platform for private equity firms to share knowledge and best practices, as well as to engage with policymakers and other stakeholders to create a conducive environment for private equity investment in Serbia.

While private equity investment has been growing steadily in Serbia, the country's banking sector still dominates the financial landscape. Commercial bank lending has traditionally been the primary source of financing for Serbia's SME sector, which has limited the size and availability of lending. However, private equity investment has the potential to provide an alternative source of funding for SMEs and other businesses in Serbia, which could help to diversify the country's financial sector and boost economic growth.

Overall, private equity investment has had a positive impact on employment and commercial aspects of Serbia's economy. As private equity firms continue to invest in the country, it is expected that the benefits of this investment will continue to be felt in the years to come.

Portfolio and Asset Management

Private equity firms in Serbia are known for investing in middle-market companies where they can add value through active management and operational improvements. Once an investment is made, the management team works closely with the portfolio company to maximize its value and achieve its strategic goals.

Effective portfolio and asset management is crucial for private equity firms to generate returns for their investors. This involves monitoring the performance of the portfolio companies, identifying areas for improvement, and implementing strategies to enhance their growth and profitability.

Debt management is also an important aspect of portfolio management. Private equity firms need to ensure that their portfolio companies have access to the necessary capital to fund their growth plans, while also managing their debt levels to maintain financial stability.

In addition, private equity firms in Serbia need to manage their assets effectively to ensure that they are deployed in the most efficient way possible. This involves assessing the risk and return profile of potential investments, conducting due diligence to identify potential issues and risks, and structuring the investment to minimize risk and maximize return.

Overall, effective portfolio and asset management is critical for private equity firms in Serbia to achieve their investment objectives and generate returns for their investors. By working closely with portfolio companies and managing their assets and debt levels effectively, private equity firms can create value and deliver strong returns over the long term.

Serbian Private Equity Events and Reports

The Serbian Private Equity Association (SPEA) regularly hosts events and publishes reports related to private equity in Serbia. These events and reports provide valuable insights into the private equity industry in Serbia and the wider Southeastern European region.

One of the most notable events organized by SPEA is the SEE Private Equity and M&A Forum. This annual conference brings together private equity professionals, investors, and entrepreneurs from across the region to discuss the latest trends and opportunities in private equity and mergers and acquisitions. The forum also provides a platform for networking and deal-making.

SPEA also organizes other events throughout the year, including workshops, seminars, and roundtable discussions. These events cover a wide range of topics related to private equity, such as fundraising, deal structuring, and exit strategies.

In addition to events, SPEA also publishes reports on the private equity industry in Serbia. These reports provide detailed analysis and insights into the market, including trends, challenges, and opportunities. Some of the topics covered in these reports include fundraising, deal activity, and exits.

One of the most recent reports published by SPEA is the Private Equity Market Overview for Serbia and the Region. This report provides an overview of the private equity industry in Serbia and the wider region, including market size, deal activity, and fundraising. The report also includes case studies and interviews with industry experts.

Overall, the events and reports organized by SPEA play an important role in promoting and developing the private equity industry in Serbia. They provide valuable insights and networking opportunities for industry professionals, investors, and entrepreneurs, and help to raise awareness of the benefits of private equity investment in the region.

Comparative Analysis: Serbia and Slovakia

Private equity is an alternative investment class that has been gaining popularity in recent years. It involves investing in private companies or buying out public companies and taking them private. Serbia and Slovakia are two countries in Central and Eastern Europe that have been attracting private equity investments. In this section, we will compare the private equity landscapes of Serbia and Slovakia.

Regulatory Environment

In terms of the regulatory environment, both Serbia and Slovakia have made efforts to improve their investment climates. Serbia has implemented reforms to improve fiscal discipline and introduced numerous incentives to attract private equity and venture capital investments. On the other hand, Slovakia has implemented measures to simplify the investment process and reduce bureaucracy. It has also introduced tax incentives for investors.

Market Size and Performance

The private equity market in Serbia is relatively small compared to Slovakia. According to the Serbian Private Equity Association (SPEA), the total value of private equity investments in Serbia in 2019 was €70 million. In comparison, the private equity market in Slovakia is more mature, with a total value of €1.3 billion in 2019, according to the Slovak Association of Private Equity and Venture Capital (SAPEV).

Investment Focus

Both Serbia and Slovakia have a diverse range of sectors that are attractive to private equity investors. In Serbia, the most active sectors for private equity investments are IT, healthcare, and consumer goods. In Slovakia, the most active sectors for private equity investments are manufacturing, energy, and real estate.

Exit Strategies

Exit strategies are a crucial aspect of private equity investments. In Serbia, the most common exit strategy is through trade sales, followed by IPOs and secondary buyouts. In Slovakia, the most common exit strategy is also through trade sales, followed by IPOs and share buybacks.

Conclusion

In conclusion, Serbia and Slovakia both have attractive investment climates for private equity investors. While Slovakia has a more mature private equity market, Serbia has made significant efforts to improve its investment climate and attract private equity investments. Both countries have diverse sectors that are attractive to investors, and trade sales are the most common exit strategy in both markets.

Frequently Asked Questions

What are some recent private equity deals in Serbia?

Recent private equity deals in Serbia include the acquisition of a majority stake in Serbian software company Vega IT by Belgian private equity firm Fortino Capital, and the acquisition of a minority stake in Serbian IT company Execom by the European Bank for Reconstruction and Development (EBRD).

What publications cover private equity news in Serbia?

Publications that cover private equity news in Serbia include the Serbian Private Equity Association (SPEA) website, which provides news and insights on the private equity industry in Serbia, and CMS Expert Guides, which offers expert analysis and commentary on the legal and regulatory aspects of private equity in Serbia.

What are the top private equity firms operating in Serbia?

Some of the top private equity firms operating in Serbia include Mid Europa Partners, Enterprise Investors, and South Central Ventures. These firms have a strong track record of investing in Serbian companies across a range of sectors, including technology, healthcare, and consumer goods.

How has the private equity industry in Serbia evolved over the past decade?

Over the past decade, the private equity industry in Serbia has grown significantly, with an increasing number of firms entering the market and a growing number of deals being completed. The industry has also become more sophisticated, with a greater focus on value creation and operational improvement in portfolio companies.

What are the biggest challenges facing private equity investors in Serbia?

Some of the biggest challenges facing private equity investors in Serbia include a lack of transparency and regulatory clarity, as well as a shortage of high-quality investment opportunities. In addition, the country's small market size and limited access to capital can make it difficult for private equity firms to achieve scale and generate strong returns.

What impact has private equity had on the Serbian economy?

Private equity has had a positive impact on the Serbian economy, helping to drive growth and innovation in a range of sectors. Private equity investment has also helped to attract foreign capital and expertise to the country, contributing to the development of a more dynamic and competitive business environment.