Why Emerging Europe?

Compelling opportunities in Emerging Europe

Emerging Europe
buoyant region converging with the rest of Europe

  • incubator for thriving companies
  • increasingly participating in European & global supply chains - vast number of companies shifting production here

Central & Eastern Europe is a diverse region offering appreciable scale:

  • 350+ mln combined population

  • USD 4+ trln
    GDP (1/3 of euro-zone total)

  • 3,000+ listed companies

  • USD 1+ trln total market cap

Emerging Europe
among the fastest growing regions

 2015201620172018f2019f2020f
World3.4%3.2%3.7%3.9%3.9%3.8%
Advanced economies2.1%1.7%2.4%2.5%2.2%1.7%
Euro area2.0%1.8%2.4%2.2%2.1%1.7%
European Union2.4%2.0%2.7%2.5%2.1%1.8%
Emerging market and developing economies4.2%4.4%4.7%4.9%5.1%5.1%
Commonwealth of Independent States-2.2%0.4%2.1%2.3%2.2%2.2%
Emerging and developing Asia6.7%6.5%6.5%6.5%6.5%6.5%
Emerging and developing Europe4.7%3.2%5.9%4.3%3.6%3.3%
Latin America and the Carribean0.1%-0.6%1.3%1.6%2.6%2.8%
Middle East and North Africa2.6%5.0%2.2%3.5%3.9%3.5%
Sub-Saharan Africa3.4%1.5%2.8%3.4%3.8%3.8%

* Source: IMF WEO July 2018

Emerging Europe
boasts lowest taxes & labor costs

Corporate tax rates

Labor cost per hour ( E ), 2017

Taxes much lower in CEE vs. developed world

States provide tax incentives & additional stimulus to attract foreign investors

While convergence has been driving income growth, wages are still far below European averages

Min wages range b/n €194 in Bulgaria and € 425 in Turkey, vs. €1,473 in Germany and €1,500 in UK

Emerging Europe
stock markets lagging behind

 
 MSCI EFM
Europe+CIS, €
30.09.2018
MSCI EFM
Europe+CIS
ex RU, €
30.09.2018
YTD-6.07%-20.18%
1Y-3.24%-16.64%
3Y,
annualized
+5.28%-2.31%
5Y,
annualized
-3.72%-6.16%
10Y,
annualized
-2.22%-3.99%

Emerging Europe
compelling valuations

P/E 2018f

P/B, mrq

Div Yld

P/E per country, ttm

Our Global Partners and Clients

Over 15 years we’ve built a solid reputation as a reliable partner -- our relationships with clients and partners are based on mutual trust and alignment of interests. We work with various local and international institutions in helping clients tap into the potential of Emerging Europe. We establish deep and enduring relationships with our clients to fully understand their unique investment needs.

Since 2012 we represent one of the top global asset managers, Schroder Investment Management (Schroders) in the local markets.

Since 2016 our Canadian partner is Cheverny Capital, affiliate of Cordiant Capital, a Canadian EMD specialist.
In Asia we work with Daishin Asset Management in managing the investment portfolio of K-Biz (Korea Federation of Small & Medium Business) - one of Korea’s top institutional investors, focusing on Emerging European equities.