An LP perspective on CEE Private Equity and Venture Capital: resilience and opportunity

Private equity has transformed Europe over the past four decades, growing from €5 billion in assets under management in 1983 to over €1.2 trillion today. It now supports millions of jobs and drives innovation and long-term value creation as well as fosters innovation and growth. Within this, Central and Eastern Europe (CEE) continues to strengthen its position as a region of growing maturity and opportunity, one that limited partners (LPs) should not overlook.

CEE private equity activity in 2025 demonstrated resilience in a more challenging global environment. According to Invest Europe’s latest Central & Eastern Europe Private Equity Statistics, investment reached €2.57 billion and fundraising remained relatively strong at €1.87 billion indicating a relatively balanced pace of capital deployment and fundraising, rather than a build-up of excess capital. Notably, the composition of capital continued to evolve, with private investors, particularly family offices and high-net-worth individuals, playing a more prominent role in some markets, while the relative share of government and institutional capital has moderated in others. This suggests a gradual broadening of the investor base and a more balanced ecosystem. Developing a sustainable base of local institutional investors and reducing dependency on international institutional investors is key to developing the private equity eco-system. 

Why CEE deserves LPs’ attention

1. The structural thesis remains intact

Private equity penetration in CEE remains low at 0.09% of GDP in 2025, compared with around 0.55% across Europe. That gap highlights the underinvestment in the region and it’s potential for further growth.  CEE has strong job creation momentum generating over 5% of all net PE-related jobs in Europe but less than 1% of total private equity funds raised in Europe, highlighting a massive gap between the region’s strong local economic growth and the amount of capital attracted. As CEE economies continue to grow and converge with Western Europe, and as local capital markets deepen, the role of private equity is likely to expand further.

For LPs, CEE offers differentiated exposure within Europe, combining higher growth potential with less crowded markets and relatively lower multiples.

2. Strong local ecosystem and talent

CEE has developed a multi-tiered private capital ecosystem, with global sponsors, pan-European managers, regional funds and local GPs operating alongside each other with investment strategies that include private equity, venture capital, private credit, renewable energy and infrastructure. This diversity across strategies and ticket sizes reflects a market that is growing in maturity. Local and regional GPs play a central role in deal origination, particularly in the lower & mid-market, supported by strong networks and deep expertise. Private equity is actively professionalising CEE businesses, offering founder succession solutions and helping them scale beyond domestic boarders. At the same time, international investors are increasingly active in larger deals attracted by highly profitable and quality businesses, reinforcing the market’s credibility and exit routes whilst providing cash distributions to LPs.

3. Governance and transparency underpinning investor confidence

Governance and transparency standards in CEE are a key consideration in manager selection, alongside track record, strategy and fund structure. Players in the CEE ecosystem operate within recognised international frameworks, ensuring consistency and comparability across funds and vintages however remain in need of LPs to channel long-term capital into portfolio companies thereby scaling businesses, improving operations, accelerating innovation, driving competitiveness, strengthening financial resilience as well as supporting Europe’s strategic initiatives in energy efficiency

EBRD's perspective

CEE offers diversification, attractive risk-adjusted returns and access to fast-developing EU economies. With relatively low private equity penetration and maturing ecosystems, CEE remains a high-potential region where private equity can drive real value. For LPs with vision, it’s time to take a closer look.

At the European Bank for Reconstruction and Development, since inception we have committed c. €3.9 billion to 141 CEE private equity funds managed by 84 fund managers, backing thousands of portfolio companies through multiple cycles. We have seen first-hand what skilled regional managers can build and how patient, committed LP capital can support that development. Activity of local LPs is nuanced with local pension funds active in some markets and not others, whilst other markets are more dependent on limited foreign capital. The Polish InnovatePL is a welcomed initiative which seeks to bridge the gap between public institutions and private investors. We remain committed to the region and confident in its ability to deliver both returns and impact.

Anne Fossemalle
Director, Equity Funds, European Bank for Reconstruction and Development (EBRD)
Member, LP Council, Invest Europe