Allocation determinants of institutional investments in venture capital and private equity limited partnerships in Central Eastern Europe

Alexander P. Groh (), Heinrich Liechtenstein and Miguel A. Canela
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Alexander P. Groh: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Heinrich Liechtenstein: IESE Business School, Postal: Research Division, Av Pearson 21, 08034 Barcelona, SPAIN
Miguel A. Canela: University of Barcelona

No D/691, IESE Research Papers from IESE Business School

Abstract: Growth expectations and institutional settings are favorable in CEE to establish a vibrant VC/PE market. However, there is lacking supply of risk capital. We address the obstacles for institutional investments in the region via a questionnaire addressed to (potential) Limited Partners worldwide. The respondents provide information about their criteria for international asset allocation. The protection of property rights is the dominant concern, followed by the need to find local quality General Partners and by the management quality and skills of local entrepreneurs. Further, the expected deal flow plays an important role for the allocation process, while the investors fear bribing and corruption. CEE is regarded as very attractive, especially the economic and entrepreneurial activity. However, the investors are not comfortable there with the protection of their claims.

Keywords: Venture capital; Private equity; International asset allocation; Institutional investors (search for similar items in EconPapers)
JEL-codes: G23 G24 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2007-05-07
New Economics Papers: this item is included in nep-ent and nep-tra
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Citations: View citations in EconPapers (3)

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