Baring Private Equity Partners, the private equity unit of Dutch bank ING, is planning to launch a new fund focusing on the burgeoning market of Central Europe.
The firm’s Central European team, led by Gyuri Karady, is aiming to raise a fund that could be “two to three times” the size of the firm’s debut Central European fund, which closed on E86m in 2001.
The debut fund has made seven investments across Bulgaria, Hungary, Poland and Romania, and has already achieved one exit with the sale of Topway Foods International, a Romanian condiments manufacturer, to Norwegian multinational Orkla. The fund makes investments in the E7m to E15m range.
According to Karady, the next fund will focus on mid-market, old economy investments of between E10m and E25m. The firm will also seek to expand its investment geography to include both the Czech Republic and Slovakia.
Investors are increasingly being drawn to the countries of Central and Eastern Europe as the nations in the region prepare for EU accession. In May 2004, Poland, Hungary, Czech Republic, Lithuania, Latvia, Estonia, Slovenia and Slovakia will be among a group of ten states to join the European Union.
Further evidence of the increased interest in the region came from mezzanine debt provider Mezzanine Management this week who announced the final close of their debut Accession Mezzanine Capital Fund (AMC), which will make investments in transactions involving middle market enterprises principally in Poland, Hungary, the Czech Republic, as well as the Slovak Republic and Slovenia. AMC made its first investment in the region, providing funding for the E30m buyout of Danubius Radio by Advent International, in May.
Speaking to Dow Jones, managing partner Karady said the fund would be pre-marketed “before the end of the year”, with fundraising proper to begin in early 2004.