Nine of them have invested or still have investments in Romania, according to the information Ziarul Financiar got.
Alternative investment managers are those managers that invest the financial resources in assets other than those regarded as traditional, i.e. stocks, bonds or cash. Among the best-known alternative investments are private equity funds, which invest in closed companies, hedge funds, which can make any kind of investments, real estate and infrastructure funds, art and commodities funds. The choice of investments is almost unlimited to alternative investment managers, particularly because they do not yet have to follow strict rules as traditional investors like equity and bond funds do.
World’s largest alternative investment managers have reached $3,136 billion assets, entrusted to them by pension funds, insurance companies, sovereign funds and foundations. Pension funds had $1,234 billion invested in alternative assets in 2011, according to Towers Watson, the bulk of which with real estate funds. Insurance companies had $285 million and sovereign funds had $135 billion in alternative assets.
The real estate investment fund owned by US’ CBRE Global Investors is the largest alternative investor in the world, with $94.1 billion assets at the end of last year. CBRE has not invested in any real estate projects in Romania, but has its consultancy unit operating on this market.
Second largest is another US group, Carlyle, which manages world’s biggest private equity fund, with $90.741 billion assets at the end of 2011. Carlyle invested on the Romanian market in the early 2000s, when it bought two manufacturers of hard capsules for the pharmaceutical industry held by Canada’s Technophar Equipment and Service Limited, established by a Romanian.
Carlyle had been closely monitoring the local market before the onset of the crisis in 2008, announcing interest in expanding its presence in this country. It even hired two Romanians, Dan Farcasanu and Catalin Breaban, who should have worked for the office in Warsaw, Carlyle’s Central and Eastern European operations’ headquarters.
The onset of the crisis changed Carlyle’s plans, which closed the office in Warsaw and thus postponed Romanian plans. It is hard to say whether its interest in Romania returns on not in the coming years, particularly because it has shifted focus towards Middle East and Asia.
“Private equity funds with a regional presence in Central and Eastern or South-Eastern Europe are still interested in Romania but unfortunately there are not enough projects here or very few of them materialize. Global investment funds’ approaches differ but they are watching large emerging markets such as China, India and Brazil where growth opportunities are more attractive than in Romania,” said Dan Farcasanu, the first Romanian recruited by Carlyle who is now chief investment officer of private equity fund Resource Partners, which operates in the region.
Another giant private equity fund that did not leave when the crisis struck is US’ Advent International, which has invested more than EUR200 million in Romanian companies since 1998. Advent International had $23 billion in assets at the end of last year. Its biggest investments include drug producers Terapia, Labormed and private clinics. Advent created the largest private clinic network in Romania, Regina Maria. The fund also owns stock in brick maker Ceramica Iasi and paint maker Deutek.
CVC, 27th in the ranking, bought from ABInBev, the producer of Bergenbier, the Central and Eastern European beer making operations for $3 billion in 2009, which it consolidated in the StarBev group. The fund sold its beer business to Canada-based Molson Coors Brewing earlier this year.
Hedge funds are another category with many representatives high up in the ranking of the alternative investment managers. World’s largest hedge fund is Bridgewater Associates, with $76.1 billion in assets.
Romania got hedging investments from the US’ Elliott fund, the largest shareholder of Fondul Proprietatea, which paid about EUR160 million for 15%.
Ninth largest alternative investment fund, RREEF Alternatives, owned by Deutsche Bank, invested in real estate in Romania. Warburg Pincus invested in real estate together with Spanish-held GED, but was not too successful. Aberdeen invested in an office tower, and Heitman developed two projects that went bankrupt, though. The major investors also include Apollo Global Management, which entered the local market with the real estate division.
(English version by Loredana Fratila-Cristescu)