Aureos holds second close on $67m for Central Asian fund

The emerging markets firm hopes to raise $100m for the fund, whose investor base includes the Kazakhstan government-backed fund of funds Kazyna Capital.

Aureos Capital has held a second close on $67 million for its Central Asia Fund, which is targeting small- to mid-sized companies in the region.

The firm held a first close in 2007 on $50 million, $10 million of which came from the Kazakhstan government. Aureos is targeting $100 million for the fund.

Aureos plans to commit 70 percent of its capital to Kazakhstan. The remainder will be devoted to opportunities in Kyrgyzstan, Azerbaijan, Georgia, Tajikistan, Turkmenistan and Uzbekistan. The fund will make investments of between $2 million and $10 million.

Aureos said it has attracted two new investors – the Development Bank of Japan and the European Bank for Reconstruction and Development.

It has completed two investments from the Central Asian fund, including injecting $10 million in Leasing Group, a company that provides financial leases for equipment for small- and medium-sized business in Kazakhstan. The firm has also invested $5 million in Kyrgyzstan-based Ala TV, the country’s leading cable television operator.

“There is a full pipeline of deals for the next 18 months,” Sev Vettivetpillai, chief executive of Aureos Advisers, which provides advisory services to Aureos, said in a statement. “Despite current market circumstances, medium-sized businesses are still seeing good opportunities for regional expansion, providing fertile ground for our Central Asia Fund to invest.”

The expansion of a middle class in some Central Asian economies has created investment opportunities in domestic markets, Tamerlan Hamidzada, partner with Aureos in Kazakhstan and Azerbaijan, said in a statement.

Aureos Capital was formed in 2001 and provides expansion and buyout capital to unlisted mid-market businesses across Asia, Africa and Latin America. Aureos has more than $1 billion in funds under management and operates in more than 50 emerging markets.