For over 18 years, investment company umgi has been helping businesses develop, modernize, and become more competitive. Its focus is on companies operating in areas such as the green economy, medicine, mining, and manufacturing.
Nowadays, the company manages eight assets located in seven countries. The total market value of its portfolio companies is over USD 500 million.
Nadiia Kaznacheieva, Chief Investment Officer at umgi, discusses how private investors think, what they expect from businesses, how they differ from international donors, and what entrepreneurs need to prepare to attract investment.
About umgi: an investor with a scaling instinct
umgi is an international team with offices in four countries and a portfolio spanning seven countries. Is it the result of strategic planning or a response to external challenges?
Development has been embedded in umgi’s DNA since its inception. Our objective is to build an efficient and growing business, and we have been consistently implementing this model since 2016. We have been actively developing both in Ukraine and foreign markets long before 2022. The events of 2022 were more of a catalyst than a cause. Our course to get more international presence was defined back in 2020, so today we are merely implementing the strategy.
Your focus areas include industrial production, AI hardware, and waste recycling. What makes one investor interested in such different businesses?
For us, for the team, and for me, an impact is crucial for the investment. Therefore, when we choose the investment object, we always project whether the business has a positive impact on the country and society.
When making decisions, apart from financial indicators, we consider, namely, an important criterion that cannot be quantified. It is truly dedicated company founders who are immersed in their businesses and wish to create a local or regional champion with us.
About Ukrainian business
You claim you are willing to invest in Ukrainian businesses even during a full-scale war. What businesses are you interested in?
We invest in sectors where we already have expertise: waste management, manufacturing, and logistics. Such areas are often deemed unattractive, but we see them as an opportunity to combine financial benefit with actual impact. Waste management is an example of an impact investment: we earn money and contribute to the country’s ecological modernization. umgi is focused on projects in complex and capital-intensive areas: packaging production, industrial materials, and logistics infrastructure. One such potential project is the construction of a terminal at Pivdennyi Port, which we plan to undertake as part of the post-war reconstruction.
This year, we started reviewing two new areas. The first one is companies involved in the AI supply chain (not data centers, but data center equipment manufacturers). The second one is suppliers for the energy transition: not generation, but whatever ensures related operations. Currently, we are working in these areas mainly in Europe to bring these technologies to Ukraine in the future.
You already have experience in scaling Ukrainian businesses, with such companies as VESCO, Feednova, and Inwire. What made you interested in these businesses?
Our standard strategy is a business with a successful model and a product with development prospects.
Recently, Spain and Italy have been traditional markets for VESCO; therefore, opening production facilities there was a logical continuation for the asset development. Nowadays, VESCO is one of the world’s leaders in producing ceramic mixtures and supplying white polymer clays.
At Feednova’s founding, Ukraine had no independent processor of livestock waste. As the first such facility, it remains the only independent operator converting meat‐processing byproducts into organic fertilizers and feed additives for both farm and domestic animals. We at umgi decided to invest in this new business area for Ukraine back in 2020, as such a model had proven its efficiency in Europe.
Inwire Group was a project we took from scratch. Still, the company quickly gained a strong position in the market and became one of the leaders in Ukraine and a well-known player in its niche in the Turkish market. Currently, it is one of the renowned manufacturers and suppliers of flux-cored wire and briquettes for metallurgical plants in the EMEA region.
Methods to attract umgi investment
What makes you think a company is ready for investment, and what businesses are of interest to umgi?
We need to see that the business is not merely profitable, but strategically mature. This means the following: transparent operations, clear structure, and a team planning 5–10 years. We never work with companies that are not ready to abandon “shadow schemes” and introduce transparent corporate practices. Still, if we see potential and readiness for a transformation, it may be a point for discussion.
We cherish a company’s ability to generate dividend cash flow or have the potential for a profitable exit. However, financial parameters are only one part of our assessment. The market, the product, and, most importantly, the team determine whether a business is ready to grow with us.
Added value: what umgi provides
umgi develops businesses by scaling them to other countries. How does this work in practice? How soon can a company “make a debut” after an investment?
umgi doesn’t invest but joins businesses as a reliable long-term partner that shares management approaches, takes on certain risks, and helps scale. We always review companies independently; it’s a tailor-made approach.
Our philosophy is simple: businesses should maximize their local potential before expanding into international markets. This allows them to improve positions, test the product, collect feedback, and get a financial cushion for further scaling. If the company has already gained competitive advantages – technological, operational, or product – then we look for expansion opportunities together with the team.
Any deadlines? None. It all depends on the business characteristics. For example, we are studying the biofuel production market, a product intended for the European market. That said, there are cases when we help local businesses replace imports in Ukraine, and then enter the markets of Poland, Romania, Spain, or France.
Export revenue is not only about growth for Ukrainian companies, but also about stability. It allows them to hedge currency risks, which is crucial given the lack of macroeconomic stability.
Our local teams in Poland, Romania, and Turkey allow us to support businesses in the new environment. How does that work?
For Ukrainian investors looking to scale their businesses, umgi provides support through its global network of offices, the expertise of local professionals, and established partnerships across diverse markets. As a team, we get deeply involved in business projects with our partners. We have an asset management division in place that helps entrepreneurs set up operational activities, for example, their financial function: find a financial director, introduce financial accounting and reporting, attract additional loan capital, etc. umgi also employs high-level IT professionals who select the best tools and technical solutions for businesses. We help some of our portfolio companies to gather a commercial team by either hiring personnel or sharing our experts.
About our approach
You have 25 years of experience in private equity, M&A, public administration, and funds in London. What of the said experience is most valuable for your work at umgi today?
Everything I learned over the years counts. I spent half of my career advising international companies that entered the Ukrainian market in the period of 2006–2016. This allowed me to understand the things a foreign investor was looking for, the companies, and their quality he expected to find in Ukraine. At the same time, I worked in the field of M&A with both international and local players. The said experience helped me to establish a powerful network within the Ukrainian business environment, which became an additional advantage for umgi.
You worked with infrastructure giants, and you were a deputy minister. What is the fundamental difference between managing public resources and private capital?
The difference is fundamental. My two years in government gave me insights into public-sector operations and sparked my interest in what has become my passion: infrastructure and transportation. This industry has one of the highest social impacts: bridges, roads, and stations operating for decades, and changing the quality of life.
In the private sector, profit and efficiency are major parameters. In the public one, social responsibility. I believe the state should not manage businesses and compete with private companies; its role is to create conditions: build infrastructure, manage resources to ensure business development, set a relevant legislative framework, etc.
Recently, there have been more discussions on the need for a new type of leadership, which should be more flexible and people-centered. Is this approach relevant to you, and how is it manifested in your interaction with entrepreneurs?
I believe that a human-centric approach to business is essential; a successful company is not defined only by its product or financial performance, but also by its culture, responsibility, and relations within the team.
Source: Forbes