Marfin targets hospitals in SE Europe spree

LONDON (Reuters) – Buyout firm Marfin Investment Group (MIG) plans to invest as much as -1 billion ($1.38 billion) in private hospitals in Southeastern Europe as part of a planned yearlong acquisition spree across the region. It has already said it is targeting the telecommunications, infrastructure, energy and utilities sectors, as well as companies with strong real estate exposure. Hospitals also fit into its existing mix. «This is a typical example of the macro-economic based trends we follow,» said Matteo Stefanel, chairman of the the fund’s recommending investment committee, in an interview with Reuters. «People in the region are getting older but also wealthier, and public healthcare doesn’t always meet their standards. So the private healthcare market is growing amazingly.» The buyout firm, run by former Burger King CEO Dennis Malamatinas, already owns three hospitals in Greece and has announced it is opening the first private hospital in Albania. It is also looking at opportunities across the Balkans. The sector has attracted more interest from buyout firms across Europe. UK-based Cinven, for example, has spent about $4 billion buying private healthcare clinics in Britain and Spain in the last month. About -2 billion of the -5.2 billion MIG raised came from shipowners and other wealthy Greek individuals, said Stefanel, 32. The balance was primarily from investors in the rest of Europe and the United States. MIG is unfazed by current credit fears despite tighter lending criteria, he said, and already has found targets for the money in its focus countries Greece, Cyprus, Albania, Bulgaria, Serbia, Hungary and Romania. It may also do deals in Turkey, Estonia, Russia and Ukraine. «We have our entire pipeline pre-identified and we have committed all our funds to specific deals,» Stefanel said. «We feel comfortable we’ll be investing the entire -15 billion within one year’s time.» The debt ratio used by MIG – which typically borrows about twice what it invests of its own cash for acquisitions – is lower than that used by most buyout firms, which often fund their deals with as much as 80 percent debt. Stefanel, who joined MIG in March from Deutsche Bank where he oversaw coverage of financial institutions in Italy, Greece and Southeast Europe, added that he is confident some of the regional hostility to cross-border deals will not dent its acquisition plans. «We only look to a small extent at recently privatized industries,» Stefanel said, addressing the issue of governments trying to block foreign takeovers of strategic assets. MIG is also undaunted by the current backlash against private equity because it says its structure avoids many of the controversial elements of the industry. «We believe we are different from our private equity competitors,» he said.

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