Another dragon enters private equity

Dragon Capital, a Ukrainian investment banking group, is raising its first private equity vehicle. It hopes to raise in excess of $100m to target investments in the Ukraine, Moldova and Belarus.

Ukrainian investment banking group Dragon Capital is hoping to raise more than $100 million for its debut private equity vehicle.

Ukraine: a contracting econmoy

The Europe Virgin Fund will invest in businesses operating in the Ukraine, Moldova and Belarus in sectors such as retail, fast moving consumer goods, industrials, telecom, media, technology and pharmaceuticals.

Dragon Capital, which is not to be confused with the Vietnamese asset management group of the same name, is an investment banking group with bases in the Ukraine and Czech Republic.

Dragon’s private equity division is headed by Chris Kamtsios, a former senior partner at Ineko Capital Partners, a Ukrainian private equity firm. Prior to Ineko, Chris worked for four years as director of investments at Commercial Capital Group, the private equity arm of Commercial Bank of Greece.

The Europe Virgin Fund’s investment area has been hit hard by economic instability. The Ukrainian economy is forecast to contract in 2009 by up to 11.2 percent, according to an analyst poll by Reuters, while the Moldovan economy has been crippled by falling remittances, which constitute around a third of its gross domestic product. Belarus this month negotiated negotiated a $2.4 billion loan from the International Monetary Fund and a $2 billion loan from Russia to shore up its finances.

The Europe Virgin Fund has received a $20 million commitment from Dragon Capital. The European Bank for Reconstruction and Development, which is mandated to build market economies in countries from Central Europe to Central Asia, is currently considering a commitment of up to $30 million.

The fund is believed to have a hard cap of $120 million.

Dragon Capital was unavailable for comment at press time.