Bering Balkan Fund. Jacob Grapengiesser Partner, East Capital. Growth and politics – benefits of EU accession still valid. High long term GDP growth : Balkan countries at 3.5%-5% vs <2% for the Euro area Political stability and EU accession as an anchor of reforms.
Partner, East Capital
High long term GDP growth: Balkan countries at 3.5%-5% vs <2% for the Euro area
Political stability and EU accession as an anchor of reforms
Member of EU since 2004
Member of EU since 2007
Member of EU since 2007
Potential candidate country, SAA signed in May 2008
Bosnia & Herzegovina
Potential candidate country, SAA signed in June 2008
Source: Bosnian Embassy, Sweden; Macedonian Embassy, Sweden, IMF WEO September 2011
Public debtlevels far belowotherEuropeancountries.
Balkan countriesfulfill Maastricht criteriaregarding public debt.
Markets far below peak levels.
Economic contraction, but not more than European average.
Source: Bloomberg and IMF (November 03, 2011)
In 2011, smaller Balkan markets best performing markets in Europe.
Outperforming large indexes by 20%-30%.
Source: Bloomberg, 04 November 2011
Strong domestic economy.
Public finances in a good shape.
Inflation at historically low levels.
Solid banking sector & attractive valuations.
Turkey used to have high budget deficit due to ever changing governments.
Government debt to GDP has declined from 74% 2002 to 39% today.
Source: IMF World Economic Outlook (April 2011), Eurostat, TurkStat
Well capitalized banking sector, no risk of defaults.
Strong banking sector was key reason for strong economic recovery.
Profitability should increase in 2012 with expanding margins.
Source: IMF, Turkish Banking Regulation and Supervision Agency (BRSA)
MSCI EM Bering Europe % Balkan Index
Q3 2011 -24,1 -30
2011 YTD -26,8 -25,5
Since inception -28,6 -29,4
Annualisedsince inception -6,3 -6,5
Note: Figures as of 2011-09-30
Performance since inception
Smart financial set up with very dilutive share capital increase.
Top class strategic partner.
Weneedtoconvince the governmentto support us as well as get manage- ment on board (withoutthembeingmotivated).
“Manual” work process: little financial information, no broker coverage, limited liquidity.
Capitalizing on local contacts.
Promote value creative strategies.
Potential GDP growthof 4-5%.
Low public debt.
Localknowledge and contactnetworkessentialtorun the funds.