Arx inches closer to €125m final close

The lower mid-market firm has held a €102m second close on its third CEE-focused fund.

Arx Equity Partners has €23 million left to raise for its first fund since becoming independent from German private equity firm Deutsche Beteiligungsgesellschaft in early 2008.

Fomerly known as DBG Eastern Europe, the firm has held a second close on €102 million for Arx III, which is targeting a €125 million final close. It began fundraising in early 2008 and held an €83 million first close in October on the Central and Eastern Europe-focused fund.

Like its predecessor, which closed on €67 million in 2004, the fund will target the lower end of the mid-market. The firm’s first fund, which raised €46 million in 1997, returned net profits of €190 million to investors, according to the firm. Fund II, meanwhile, “has demonstrated resilience to the current economic downturn, with no write-offs, limited write-downs plus three profitable full or partial exits”, Arx said in a statement.

Fund III has already done two deals: in April it invested an estimated €20 million to take control of Czech ophthalmic chain Lexum Group, while in March it bought a controlling stake in Polish pet store chain Kakadu for an undisclosed amount.

Jacek Korpala, Arx co-managing partner, said in a statement the region offers excellent opportunities for investors with local knowledge. He added: “Acquisition finance is still available in certain CEE countries, for lower mid-market deals, and while there are few alternative sources of exit liquidity, there are also a large number of business owners who have over-extended into non-core ventures.”