SEAF Opportunity Serbia Fund
In October 2013, SEAF launched the Opportunity Serbia Fund in partnership with Opportunity International. The fund will build upon the success of SEAF’s previous regional funds, including the SEAF South Balkan Fund, to identify and invest risk capital in high growth companies. The SEAF Opportunity Serbia Fund will invest in growth stage small and medium enterprises (SMEs) in collaboration with local entrepreneurs.
Serbia currently has a stable, well-capitalized banking sector and its government is undertaking reforms to attract greater foreign direct investment (FDI). Serbia also boasts a well-educated and recognized human capital base in the technology sector. However, the recent global economic crisis left a legacy of large macroeconomic imbalances, including high levels of unemployment especially among Serbian youth, significant regional income disparities, and a large fiscal deficit. Though the country continues to lag behind its regional counterparts in economic development, Serbia recently passed new labor laws, privatization laws, and bankruptcy laws as a means of increasing competitiveness and will carry out fiscal consolidation as a means of becoming economically stable in the coming years.
Serbia’s SME sector has traditionally been financed by commercial bank lending, which has limited both the size and general availability of lending. The current presence of private equity funds in Serbia is inadequate due to the small market size for larger equity investments, lack of local market knowledge, and an unstable political and economic situation. Therefore, untapped market opportunities exist in Serbia capable of providing significant investment returns.