Investments

Since 2021, Mercurio has been acquiring stakes in companies that are locally competitive and serve international industrial value chains, in partnership with independent investor groups. During the investment process, Mercurio carried out the business due diligence, the buy-side transaction project management and arranged the bank financing. In the future, we aim to expand our investment activities along the investment thesis below.

EU IN THE GLOBAL COMPETITION: Both the US and China have strong industrial policies, which involve direct support and tariff protection for specific sectors (green, high-tech). The EU is a late starter in the race to become a major power with programmes such as the Green Deal Industrial Plan.

NEAR-SHORING: Given the market volatility of recent years, intensifying political risks, supply chain issues and ESG (closer to market) expectations, we expect that leading companies in the Western EU will increasingly plan to repatriate (nearshoring) production to the EU periphery, where these types of risks can be minimised. Furthermore, Far Eastern markets have become more expensive, losing their price advantage due to rising living standards.

GENERATION SUPPLY: In the Central and Eastern European (CEE) countries on the periphery of the EU, the supplier base for this type of manufacturing is classically medium-sized companies established during the transition period. In all CEEC countries, these types of firms are facing succession problems as the founding generation starts to retire more than 30 years after the regime change. These types of companies are typically stuck at a level of development that a professional management can push them through.

INTEGRATION: The regional integration of mid-sized CEE companies, which form the supplier base of the companies described in the first point, can create competitive industrial enterprises in the specific segment.

FAVOURABLE RISK-RETURN: The CEE region is not only important because of the nearshoring trend, but also because of the potential to generate additional returns due to a more favourable risk-return, given that the development of these countries is still lagging behind the Western EU. In addition, it provides the opportunity to diversify currency (EUR, CZK, HUF, PLN, RON) and country risk at portfolio level.