INTERVIEW - Serbia's EU prospects will lure more private equity capital in medium term - Mezzanine Management

By bne IntelliNews February 2, 2014

Serbia will become one of the most interesting countries to invest in the next several years as its progress towards EU membership helps to strengthen the legal framework, opens the access to structural funds and makes it more attractive for fresh private capital, Franz Hoerhager, founding partner at Mezzanine Management Central Europe (MMCE), said.

Serbia launched accession talks with the EU in January 2014 after receiving a candidate status in March 2012. Its leaders hope the country could become a full member by 2020 although some officials from Brussels argue the Balkan state would need at least eight years to achieve its final goal.

MMCE's Hoerhager told IntelliNews that Serbia is already a very interesting place to invest because the country has now with the EU accession progress started to implement a lot of reforms on the regulatory and legal sides. It is also improving the judiciary system, allowing companies to slowly but surely start getting rid of the old debt, which has been hindering the economy.  

Hoerhager expressed hope that once the old debt issue is resolved, the companies will find a new way to grow again. He was speaking on the sidelines of Euromoney's Central and Eastern European Forum held in Vienna on Jan 14-15.

"The specific reason why I am optimistic is that with the EU accession Serbia will get access to the structural funds and will be included in the private equity programmes of the European Investment Bank and the European Investment Fund, for instance, and there will be private money flow into Serbia, which will hopefully trigger the banks to lend more money," Hoerhager said.

"I think the Serbs have been also in the past always very good businessmen, which has been a little buried because of the political system, but now it will come out again and we are here to help, we have money for Serbia, we are interested to do transactions in Serbia and mezzanine is a product that is very much needed for Serbia."

Hoerhager said Mezzanine Management does not have an office in Belgrade at present but regularly visits the country and is looking at a number of transactions after having financing in the past few years Serbia Broadband. "I am definitely planning to increase our presence in the country," he added.

Serbia Broadband (SBB) is the largest cable operator in Serbia and is part of the SBB/Telemach Group, which comprises South East Europe’s leading regional Pay TV platform. The group was controlled by private equity firm Mid Europa Partners until October 2013 when Mid Europa sold it to its US peer Kohlberg Kravis Roberts (KKR) for reportedly over EUR 1bn. The deal was one of the region's largest M&A transactions last year.

In 2007, one of MMCE's funds assisted in Mid Europa's acquisition of SBB from Bedminster Capital Management. 


Hoerhager said that the food industry in particular is very interesting but declined to talk about specific companies, adding any discussions they might have on various projects are closed to the public.

"Our interest is in the manufacturing, services, healthcare, foodstuffs, drinks - we looked in a number of transactions there but they always had an old baggage so far and we do not want to get involved in the old baggage," Hoerhager said.

He added MMCE can support entrepreneurs and people who grow their companies and who do not have access to bank financing.  "We are not a venture fund but if a company is established and needs money for growth or for acquisitions this is where mezzanine is the perfect product."


Asked whether MMCE is also looking at projects in the smaller countries in Serbia's neighbourhood like Montenegro and Bosnia, Hoerhager said his company is going there on a regular basis but has not seen any transactions of interest yet.

"I do not think there will be a lot of transactions. But maybe there will be one in Bosnia or Montenegro or Macedonia and then we will consider it," he said. "The Western Balkan is part of our region so we have no limitation there."

He underlined the fast moving consumer goods industry as one of the most attractive ones for investments in the broader region as well, adding MMCE has extensive knowledge in the sector. It owns a mineral water company in Romania (Lipomin) and used to own one in Bulgaria (Devin). It also owns businesses in the food production, including Poland's second largest pizza chain Dominium.

The funds managed by MMCE provide mezzanine capital to private companies in the new EU member states, Southeast Europe as well as Ukraine and the Russian Federation. The company has offices in Austria, Hungary, Poland, Romania and Ukraine. It says on its website it has committed and invested over EUR 400mn in 28 companies across nine countries.

by Iskra Pavlova in Vienna

Related Articles

PMs of Serbia and Kosovo clash at Western Balkan summit ceremonial dinner

Serbian Prime Minister Aleksandar Vucic reportedly confronted his Kosovan counterpart at the ceremonial dinner during the Western Balkan Summit, over Pristina’s decision to re-register ... more

US puts Albania, Bosnia and Serbia on blacklist of major money laundering countries

The US department of state has included Albania, Bosnia & Herzegovina and Serbia in its latest list of major ... more

27 companies submit bids for Belgrade airport concession

Serbia’s Minister of Construction, Transport and Infrastructure Zorana Mihajlovic announced on March 13 that 27 companies responded to Belgrade’s public call for a 25-year concession to operate ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.