According to the event’s organizers, PRT Communication Group and the investment group Avantazh Capital Management, Ukraine’s first ever investment salon will be held this May in Kharkiv. The companies’ heads explained that the salon consists of meetings of international capital market participants and Ukrainian companies interested in attracting foreign investments for their business development. But, unlike forums, conferences, symposia and other formats that are well known in Ukraine, the investment salon is a low-key, inconspicuous event, which involves some 30 companies representing the Ukrainian business community and no more than 10-15 capital market players — representatives of stock markets, investment banks and funds, auditors, legal advisors, and financial and communication consultants. While this may be the first salon of this sort in Ukraine, this practice is well established abroad.
PRT Communication Group President Yaroslav Khobta believes there is a strong case for introducing such a way of attracting investments in Ukraine. For example, Khobta says, the data suggests that Ukrainian companies attracted only 6.5 billion dollars through private and public offerings in 2005 through 2010. Of this, only 2.4 billion dollars were attracted through IPOs. There were only 45 companies on the market, and they attracted an average of 100 million dollars each. This shows that Ukrainian medium-size companies, with capitalizations of up to 100 million dollars, still lack access to international capital markets. Khobta is sure there are mental, organizational and informational reasons for this, and adds that this economic blockade must be broken.
Thus, the “specialty” of the investment salons will be the fact that representatives of small businesses will be their main Ukrainian consumers. More specifically, Khobta says, the focus will be on private companies with capitalizations of 10 to 80-100 million dollars and high growth dynamics. The other side will be represented by the international capital market participants.
“The event to be held this May is just a warm-up. This fall, we are planning to hold a second salon in Kyiv, and to bring it to full capacity next year. This will be an ongoing project which will cover various regions of the country and provide a range of opportunities for Ukrainian business,” emphasizes Khobta.
The salons’ organizers are confident in their success, and see it as a very important project because, according to the Avantazh Capital Management chairman Yurii Kostohlodov, foreign investors are really interested in Ukrainian medium-sized businesses. “We took part in preparations for the group of companies AgroLeague’s debut on the Warsaw Stock Exchange, which showed the high potential investment attractiveness of Ukrainian medium-sized businesses,” Kostohlodov illustrates. “But the entry of medium and small companies’ on the capital market has its flip side, too, and it is interesting in terms of market position and dynamics of development, as such companies rarely have all the necessary managerial, corporate and communication preconditions in order to properly convey their strengths to potential investors.”
It was this observation and talks with many Ukrainian companies in need of external financing that formed the basis for the creation of a system of evolutionary preparation for companies, notes Kostohlodov. “The investment salon is not a discrete event. First of all, there is the process of preparing the meetings, a kind of ‘investment incubator’ that aims at purposefully preparing a company for entry on the capital market,” he explains.
According to Kostohlodov, national medium-sized businesses will be unable to develop further without additional information. “Therefore, only this format of communication can maximize the economic potential of our medium-sized businesses,” Avantazh’s chairman hopes. “It is time for them to learn: it is necessary to present themselves not only to their consumers but also to the investment community. Overcoming this problem will be crucial for developing our investment attractiveness.”
