Investments
Investment Region
Royalton Partners was formed to make equity investments in companies in Central, Southeastern Europe and the Baltic, with an emphasis on the European Union ("EU") accession countries (Poland, the Czech Republic, Hungary, Romania, Bulgaria, Slovenia, Slovakia, Estonia, Latvia, Lithuania) and countries earmarked for the next wave of EU enlargement (Croatia and selectively other ex-Yugoslav countries).
Investment Approach
The enlargement of the EU started in May 2004 presents an exceptional investment opportunity analogous to the accession of Spain and Portugal to the EU in 1986.
A disciplined investment strategy based on the following approach has been developed:
- Investment opportunity is analyzed in a European context
- Opportunities are identified in non-tradable goods sectors
- Royalton seeks control
- Royalton believes that significant exit premiums to initial investment valuations will be achieved through the integration of the region into the EU
The core of Royalton Partners' strategy is to focus on non-tradable sectors. Businesses in these sectors are primarily focused on servicing local markets and are not exposed to international trade. Consequently, these sectors are relatively immune from international competition, benefit from increased pricing power as price levels in the Investment Region converge with price levels in the EU generally, and benefit as these sectors grow to a size relative to the local economy (as a percentage of GDP) comparable to their Western European counterparts. Examples of those sectors are financial services, media, education, retailing, transportation and healthcare.
Investment History
Prior to forming Royalton Partners, Messrs. Williams, Babka and Vohlmuth actively managed private equity and publicly traded assets in excess of US $150 million. In 1992, they founded a joint venture in Prague with the Austrian Creditanstalt Group. The JV launched and managed the Czech Investment Fund, a US $100 million closed-end investment company. In October 1995, it became the first ever company from a former Warsaw Pact country to have its shares listed on the London Stock Exchange.
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