Seminar of investment market guru Per Stromberg "The past, present and future of Private equite” took place in Moscow
Doctor Stromberg, Professor of Finance and Private Equity at SSE in Stockholm and Head of Research at SIFR, presented results of many years of his research into the market of direct investments to the Russian public. Per Stromberg, one of the world's leading experts in the field of economics and author of some scientific research reports and publications, specializes in topics of financing of private equity and bankruptcy problems.
Professor Stromberg called funds of direct investments one of the key mechanisms for placing of private capital. Along with this, Stromberg mentioned the fact that the investor acted not just as a shareholder of a company but as a partner having access to the levers of influence on its activity as one of the remarkable peculiarities of this investment instrument. The audience was demonstrated detailed scheme of work of the funds of direct investments that, according to the professor, occupied the major part of the private investment market of countries of Western Europe and North America now.
Speaking about what was given by private investments to the companies, Stromberg singled out three key aspects. First, this is engineering of corporate governance, namely, a possibility to concentrate ownership of a company in the hands of the main shareholders, which broadens capabilities of the investor significantly. Second, many investment funds have their own industry experts whose participation in life of a company may be very useful for it increasing the level of professionalism of the company's management. Along with the built efficient structure of the organization this increases the non-financial value of a company seriously. Finally, financial engineering provides an opportunity to optimize the structure of its equity. According to Stromberg, all this makes attraction of private investors extremely desirable for majority of companies.
Speaking about Russian realities, Doctor Stromberg emphasized that the topic of private investors was especially important today for the so-called "emerging markets" to which it was common to attribute Russia. Per Stromberg said, "We all have got used to a thought that private investments are a phenomenon characteristic, first of all, for Europe and the US. However, this is already not quite true now because significant growth in the quantity of private investment funds has been registered lately in Russia, India and China." Confirming this, Professor Stromberg presented statistical data of the last decade: whereas in 2004, according to EMPEA, emerging markets accounted approximately for 7% of global private investments, already by 2009 this share grew to 26%.
Stromberg mentioned absence of clear division of investments into the venture and buy-out ones as a distinctive peculiarity of the private investment markets of China and Russia. According to him, as a rule, there investors tried to invest in small young companies but only if they had a sufficiently big potential and high speed of development. Per Stromberg also emphasized that knowledge of local specific might enable the local investment funds to press their bigger foreign "colleagues" on emerging markets.
For additional information, please contact:
Head of market communications of Stockholm School of Economics, Russia
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