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

Author

Listed:
  • Groh, Alexander P.

    () (IESE Business School)

  • Liechtenstein, Heinrich

    (IESE Business School)

  • Canela, Miguel A.

    (University of Barcelona)

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.

Suggested Citation

  • Groh, Alexander P. & Liechtenstein, Heinrich & Canela, Miguel A., 2007. "Allocation determinants of institutional investments in venture capital and private equity limited partnerships in Central Eastern Europe," IESE Research Papers D/691, IESE Business School.
  • Handle: RePEc:ebg:iesewp:d-0691
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    Cited by:

    1. Kollmann, Tobias & Kuckertz, Andreas & Middelberg, Nils, 2014. "Trust and controllability in venture capital fundraising," Journal of Business Research, Elsevier, vol. 67(11), pages 2411-2418.
    2. Daniel Hain & Sofia Johan & Daojuan Wang, 2016. "Determinants of Cross-Border Venture Capital Investments in Emerging and Developed Economies: The Effects of Relational and Institutional Trust," Journal of Business Ethics, Springer, vol. 138(4), pages 743-764, November.
    3. Alexej Sato, 2013. "Private Equity Investment in the Czech Republic," Prague Economic Papers, University of Economics, Prague, vol. 2013(2), pages 240-250.

    More about this item

    Keywords

    Venture capital; Private equity; International asset allocation; Institutional investors;

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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