Argus Capital Partners passes fund II target

Argus Capital Partners, a Central and Eastern European private equity firm, has raised €213 million ($270 million) to date for its second fund.
 
Ali Artunkal, London-based managing partner of Argus Capital Partners, said that Argus Capital Partners II held a first close of €164 million in December 2005 with a final close expected by the end of this year. The fund has already exceeded its original target of €200 million and Artunkal said that the firm is confident the fund will reach its hard cap of €250 million.
 

Artunkal: maturing of the Central and Eastern European private equity market

Almeida Capital is the placement agent for the fundraising, which has so far included commitments from pension funds, funds of funds, banks and family offices in North America, Europe, the Middle East and Asia. Artunkal said that the majority of investors in fund I, which raised $172 million in 2000, had reallocated to fund II: “We were more Europe heavy in terms of commitments compared to the first fund, which had ten investors in total, but we have also had four new US investors in this fundraising so far,” he said.
 
Artunkal said that, given the development of Central and Eastern Europe, “there is now a much more mature private equity market in the region and so we will be more focused on buyouts than early or later stage investments this time around. Our equity investment size range is €10 million to €30 million, with enterprise values of €10 million to €60 million. In fund I, our minimum investment was €5 million, but I don’t think we will be making any €5 million investments with fund II”.
 
Argus Capital Partners has also made the third divestment from its debut fund, following the sales of Aster City Cable and Fibernet. Svoboda Press, a Czech Republic commercial printer, was sold to EuroDruck Service, the commercial printing arm of German media group Verlagsgruppe Passau, for an undisclosed sum.
 
Svoboda Press was acquired in January 2000 and Artunkal said that its sales and EBITDA have since more than doubled and tripled respectively. The exit has generated a multiple of 3.9 times and an internal rate of return of 25 percent. Atrunkel said that after the exit, fund I has returned approximately 80 percent of capital to investors.
 
Argus Capital Partners, established in March 1999, spun out of the Prudential Insurance Company of America in June 2002 and has a team of eight investment professionals in London, Prague, Warsaw and Budapest.

Other private equity funds focused on Central and Eastern Europe include Société Générale Asset Management Alternative Investments’ SGAM Eastern Europe, which held a first close on €80 million earlier this year with a target of €150 million; Mid Europa Partners’ second fund focused on the region, which closed on €650 million in January of this year; and Advent International, whose ACEE III fund raised €330 million in April 2005.

Alpha Associates, a Swiss fund of funds manager, held a first close of €109 million for its €300 million targeted Alpha CEE II fund of funds in August of this year. The fund has a target of €300 million and a hard cap of €400 million.