Quo Vadis, Austria?

While international firms recently closed major transactions with FutureLab and Constantia, the domestic private equity scene has been notably silent. Firms like AXA Private Equity and DZ Equity Partner have ramped up their capabilities in Austria, but so far, there is precious little to show for it.

And there are sectors with promise - speaking to London-based investors last week, I got the impression that Austria should be more active; the technology base exists for interesting transactions and the Austrian government is supporting venture in biotechnology and the wider life sciences sector.

However, on a regulatory basis, nothing has been done in two years. While AVCO has worked out a catalogue of suggestions for regulation, the Austrian government's attention is elsewhere, leaving the industry to its own devices.

Politicians are eager to throw public money at the damaged economy and at Austrian companies that will most likely struggle to refinance themselves as banks have hardened their fists. Meanwhile, ironically, Austrian investors are sitting on cash, ready to invest, and are kept from it due to the legal environment that actively places them at a disadvantage.

Rather than spending tax money widely and indiscriminately (it must be feared), the government should re-focus on doing its actual job - providing a working framework for businesses, which includes the private equity industry. Chances are, private money might
take care of many of the issues that the governments' heavy-handed approach is unlikely to solve in any efficient way.

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• Topics
• DACH
• Austria