Sunday, June 18, 2017

Incubation stage of Slovenia investment industry

We visited KD group in Ljubljana, which is one of the major investment firms in Slovenia.

From their presentation and discussion, I think that Slovenia investment industry is still in incubation stage, for following reasons:

1. Fund sizes are small and limited; the biggest fund they have is ~740 million Euro.

2. Cost of investment is high due to lack of competition.

3. Slovenia stock exchange has only 8 company trading stocks listed with less transparency and limit openness to foreign capital.

4. There are huge amount of saving in bank, not invested in the foreseen future.

This incubation stage synchronizes with Slovenia’s transition from socialism to free market. Many Slovenia’s company are still state own and they are in process of being privatized. This reminded me the similarity as where China was about 25 years ago. The privatization and “go-public trading” can be painful and take very long from incubation stage to growth and mature stage. Before that, there are limited openness and options to foreign investment, as a result, the economic growth can be limited. I hope well and wish success for Slovenia’s transition and growth.

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