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Limited partners' perceptions of the Central Eastern European venture capital and private equity market

Author

Listed:
  • Groh, Alexander P.

    (Montpellier Business School)

  • Liechtenstein, Heinrich

    () (IESE Business School)

  • Canela, Miguel A.

    (University of Barcelona)

Abstract

Growth expectations and institutional settings in Central Eastern Europe are assumed to be favorable for the establishment of a vibrant Venture Capital and Private Equity market. Despite this, there is a lack of risk capital. We examine the obstacles to institutional investments in the region through a questionnaire addressed to (potential) Limited Partners world-wide. The respondents provide information about their perceptions of the region. The protection of property rights is the dominant concern, followed by social criteria, such as the belief in the management quality of local people, and the lacking size and liquidity of the Central Eastern European capital markets. However, Limited Partners regard the growth expectations as attractive, and those with exposure in Central Eastern Europe are satisfied with the historical risk and return ratio, they have a good knowledge of the region, are attracted by other emerging regions, and they appreciate the region's entrepreneurial opportunities and the local General Partners. Overall, the region is ranked very favorable compared to other emerging regions, and especially with respect to its economic and entrepreneurial activity.

Suggested Citation

  • Groh, Alexander P. & Liechtenstein, Heinrich & Canela, Miguel A., 2008. "Limited partners' perceptions of the Central Eastern European venture capital and private equity market," IESE Research Papers D/727, IESE Business School.
  • Handle: RePEc:ebg:iesewp:d-0727
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    File URL: http://www.iese.edu/research/pdfs/DI-0727-E.pdf
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    References listed on IDEAS

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    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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