Euroventures Hungary, the Hungarian private equity firm backed by ABN Amro, has secured a E15m commitment from the European Bank for Reconstruction and Development (EBRD) for its latest fund, Euroventures Hungary III.
The EBRD investment will be made alongside Hungarian pension funds through a specially designed investment vehicle. This vehicle will permit these pension funds to invest in Euroventures ' fund, providing them with access to the asset class for the first time.
The fund, which has a final close target of E75m will invest in medium-sized companies in the buy-out, expansion or development stage, investing between E2m and E5m.
Euroventures Hungary III is the successor to the Euroventures Hungary BV fund, the first VC fund based in Hungary to complete a full investment and divestment cycle. In its ten year life it made ten investments and yielded a pooled IRR of 31 per cent.
Euroventures Capital Advisory Kft will be the investment advisor. The company is also the advisor for the existing Euroventures Danube fund, a E15m venture capital fund launched in 2001, which also counted EBRD as an investor. Euroventures Danube Fund provides financing for high-growth small and medium-sized companies in Hungary and neighbouring countries.
The Euroventures Hungary team is led by András Geszti, founder and managing director of Euroventures Capital Kft. Geszti was a founder and first chairman of the Hungarian Venture Capital Association.
The EU accession states have of Central and South East Europe been the focus of a number of recently launched private equity funds this year, due in part to the imminent increase in the member-states of the European Union. 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 in a move that is expected to accelerate economic growth in those countries.
Most recently, Mezzanine Management closed its first mezzanine fund targeting South East Europe. Accession Mezzanine Capital, based in Vienna, closed on E115m. Also this month, SigmaBleyzer, the US fund management company based in Ukraine, said it was planning to launch a $100m private equity fund investing in the expanding South East European economies.
Baring Private Equity Partners, the private equity unit of Dutch bank ING, is planning to launch a new fund focusing on Central Europe, with a target of E250m mooted.
In June, a group of European investors, including EBRD and Global Finance, launched a private equity fund aimed at investment in small to medium-sized enterprises (SMEs) in Bulgaria and Romania. The Global Bulgaria and Romania Growth Fund initial capitalisation will be E16.25m, which could be extended to E20m.