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Investment banking in emerging Europe is not for the faint-hearted. In the 25 years since the introduction of market economics, the region has ridden a roller coaster from the highs of post-Communist privatization and EU accession to the lows of the global financial and eurozone crises.
At times deal flow in many sectors has all but dried up, putting local hopefuls out of business and sending global bankers scurrying back to the safety of London or Frankfurt. Yet a handful of hardy domestic players in countries from Poland to the Balkans have found ways not merely to survive but to thrive through rich and lean years alike.
What has enabled some firms to flourish while their less resilient brethren have gone to the wall? While business models naturally vary, there are several things these success stories – most of which date back to the early days of transition – have in common.
One is an early realization of the need for diversification. As local bankers note, most markets in central and southeastern Europe are tiny by global standards. Apart from Poland and Romania, only a couple of countries in the region – the Czech Republic and Hungary – can boast a population of even as little as 10 million.
