OREANDA-NEWS. November 18, 2014. Europe is facing three simultaneous crises: Putin, populism and Euro-paralysis, commented Financial Times foreign news editor Quentin Peel at the Baltic M&A and Private Equity Forum in Vilnius organised by Verslo zinios and SORAINEN. Speaking about the security situation, he said we still lived in a revolution that traced its roots back 20 years.

On the other hand, according to Peel, we should be grateful to Putin for reminding us that the security of the European Union depends on the situation at the very heart of the European Union. Peel, who worked as a Financial Times reporter in Moscow 20 years ago, highlighted stability as one of the advantages of the Baltics at the forefront of the security crisis. In his words, the Baltic States have undergone a highly successful reformation which has proven to be too difficult in Ukraine. Russia managed to maintain instability in Ukraine but failed in its efforts in the Baltics, Peel said.

The positive effect of stability is also confirmed by M&A market professionals. According to Margus Uudam, partner at Ambient Sound Investments and chairman of the Board of EST VCA, the geopolitical situation has had a stronger negative impact on international private equity funds rather than on the investment attractiveness of the Baltics to venture capital funds. “To increase opportunities requires local investment, and by local I mean the Baltic States. Separately we are small but all together we can be New York,” Uudam said.

Carl Bergholtz, director at GP Bullhound, added that international investors had become more cautious and risk sensitive, with the Baltic States readjusting their export strategies and local business and venture capital funds becoming more active, which was a sign of great potential to be explored.

According to Valerij Judin, partner at SUMMA Advisers, traditional sector clients from Russia have kept their focus, and the Baltics already have quite some experience and are ready for such vicissitudes.

However, Guntars Krols, partner at Ernst & Young Latvia, observed that the effects of the geopolitical situation on the Baltic market were not over yet and we might still encounter new challenges.