"Diena": "Icelandic Investors Portrait. Who He Is, Where He Earns Money, How He Learns about Latvia, and Where He Invests?" "IBS Prudentia" partner comments
22 September 2006
This year, Icelandic businessmen have acquired several enterprises in Latvia, including "Lateko banka", the chemical production plant "Ķīmiskā rūpnīca Spodrība" and one of the largest wood processing enterprises, "Vika Wood". So what is the Icelandic investor's portrait?So far, Icelandic investors entering the Latvian market tried to later expand their operations and investments. Jon Helgi Gudmundsson has transacted some of the largest deals in Latvia, enterprises affiliated with Gudmundsson have been investing money in several Latvian business sectors: wood industry (SIA Biko-Lat, SIA CED, SIA Vika Wood), construction supplies trade (SIA Depo Diy), financial sector (a/s Lateko banka). Also to be mentioned - businessman Gisli Reynisson, who initially acquired the confectionery "Staburadze", then the confectionery "Laima" and juice producer "Gutta". Unfortunately, "Diena" failed to get in touch with the two - Icelanders are rather reticent and do not like to speak about their business and future plans.
Although first Icelandic investors arrived in Latvia already in 1993, largest Icelanders' investments in Latvia were made after Latvia's accession to the European Union. Investment banker, "IBS Prudentia" partner Ģirts Rungainis points out that Icelandic investors' activities were prompted by not only Latvia's accession to the EU, but also economic development in Iceland, rising prices of real estate and companies' shares.
"The Icelanders have money from the increasing prices of real estate and other assets, they have earned comparatively much and can invest this money also in Latvia. Latvia is a small country and its mentality is easy to understand to the Icelanders, besides, investing in Latvia is comparatively easy, and business environment is also rather investment-friendly," believes Rungainis.
Seeking other opportunities
In Rungainis' opinion, Icelandic investors fall into two categories: persons with major business experience in Iceland who seek inexpensive and advantageous deals in the sectors where they do or have been doing business, whereas investors in the other category are younger businessmen - financial investors, investment bankers, who are ready to take risks and seek more complex investment cases. Experts are confident that Icelandic investors will continue making investments in Latvia, because they know and understand the Latvian market.
Rungainis notes that the Icelanders use tested methods for entering Latvia, and try to work according to their usual business practices. "They want to repeat the successful investment cycle they pulled off in Iceland. Time will come when the Icelanders will sell their shares in Latvian companies and quit the market, seeking other opportunities."
