CEE: Middle-class demand
Visit cities such as Bucharest and one might be surprised by the high-quality cars or food that are available and affordable. Middle class wealth is growing rapidly in CEE, and it brings with it a lot of pent-up demand.
Both individuals and companies are keen to catch up with the rest of Europe. Consequently, the main growth industries tailor to that wealth. Media/telecoms, financial services and consumer industries are the biggest target sectors for CEE private equity. The European Venture Capital Association awarded Innova its deal of the year award in 2007 for the investment in Automotive Components Europe (ACE). The deal was a merger between two auto parts companies, one Polish and one Spanish, acquired by Innova in 2005 and 2006. Innova diversified the product range and improved its quality, while boosting customer service and fostering further consolidation with the European market. All of this was in response to a growing demand for high-quality products in the CEE region.