Had it not been for coincidence that two strangers missed the same plane on the same day and had to spend 4 hours waiting for the next flight, maybe the private equity business in Romania would have been delayed and the gap between us and the rest of Europe would have been would be much bigger.

Abroad, this type of business is not new at all, only here it is just emerging. Firms like Blackstone, Carlyle or TPG have been around for decades. Blackstone made most of its profits by buying undervalued companies, restructuring them and reselling them at a profit. The big talk in the private equity market was when China invested $3 billion in Blackstone or when the Arab-controlled company Dubai Ports bought the company that managed 6 major American ports (later, due to political disputes, it sold the management right to the Americans).

But the term private equity refers to several types of financial activity, including hedge funds, venture capital, or leveraged buyouts.

Practically, the surplus money of some funds the need for money of private companies at a difficult time.

Two people who were late for the plane and spent 4 hours at the airport are Andrii Csonka and Rudi Wiesenthal, co-founders of ROCA (ROmanian CApital) Investments.

Csonka and Wiesenthal then convinced 27 other Romanian businessmen to pool their money and finance companies in Romania’s industry and agriculture.

“There are very few large Romanian companies and many small and very small ones. One of the main needs we identified before starting this project is the detailing and the need for consolidation,” says Rudy Wiesenthal at the ROCA 5th anniversary conference.

We want to develop the companies we work for and turn them into regional champions. “Our business model is still different from traditional private equity funds in that we invest not to sell, but to consolidate,” says Wiesenthal.

At the European level, there are 1,750 private equity funds that managed 730 billion euros last year

They are likely to reach 750 billion euros by the end of this year. There is simply a huge disparity between Western and Eastern Europe.

“If we look more closely at the numbers, Eastern Europe – although it represents 25% of the population and 10% of GDP – in terms of the funds it manages to attract, Eastern Europe only attracts 1.3% of the total administered funds. It is even sadder that Romania attracts only 0.06% of these funds, being in the last place,” explains the co-founder of ROCA.

In Western Europe, money supply far exceeds demand, while in Romania (and Eastern Europe) the opposite is true: demand far exceeds supply.

If you do not understand the culture of the company and its business, you are unlikely to be able to develop it

“We started with 4.5 million in 2018, of which 2 million are ours. From the very beginning we were joined by Mr. Brothers Suku and Paval from Dedeman and we have now reached a valuation of €78.1 million. This is after 5 rounds of capital raising, 20 transactions and two exits. In which every year I met and discussed with at least 100 entrepreneurs trying to understand the needs, understand their business stories, understand the problems and set goals. If you don’t understand the culture of that company and its business, you can’t change that,” says Wiesenthal.

Of course, the war in Ukraine affected the business of the ROCOR. “But the ability to adapt is important. Agriculture is an area where you have high volatility. But a good investment manager is someone who knows how to act not when things are going well, but when things are not going well,” he concludes.

Although Romania is an attractive market, the need for capital is still high, at the level of Romanian companies. There is still a large imbalance between demand and available supply in the market

The investment market has the potential to become a valuable contribution to the national economy: in Romania, 0.02% of GDP is represented by private capital investment vs. 0.7% of GDP at the EU level. The latest data shows significant steps forward for the local market.

In an ambiguous market context marked by numerous geopolitical and macroeconomic uncertainties, ROCA Investments is betting on consolidation and development as strategic directions in the next period:

“First of all, our stated goal is to bring ROCA Investments to the level of regional importance: a Romanian private equity firm specializing in entrepreneurial companies. We are committed to our mission of investing exclusively in Romanian companies with the desire to create regional champions through international consolidation and expansion. We will also help the growth and consolidation of small and medium-sized enterprises, the development of several management teams, the formation of Made in Romania brands, viable for any European market,” the company representative says.