Euroventures Hungary III, a new private equity fund targeting the growing Hungarian private equity market, has posted a first closing at €31 million.
The fund – which aims to close at a maximum €75 million in the summer – will invest in expansion, development, growth and buyout opportunities in Hungary and other Central European countries.
The fund is the first private equity fund in Hungary to be structured to include a vehicle that overcomes restrictions on Hungarian pension funds investing in the asset class. This approach enabled CIK, a Hungarian pension fund managed by Credit Suisse Asset Management, to become a lead investor. Three other lead investors have committed to the fund at this stage: ABN AMRO, the European Investment Fund and the European Bank for Reconstruction and Development.
“We are pleased to have been part of the process of facilitating Hungarian institutional investment in Hungarian private equity as an asset class which offers diversification for fund managers and is widely held by long-term institutional investors in Western Europe,” said Andras Geszti, Euroventures’ managing director.
Added Thomas Howells, Euroventures director: “Although the investing climate and the current preference for large buyout transactions has made fundraising extremely difficult for Central European funds, we are pleased that we have been able to convince investors that growth and European Union convergence may offer attractive private equity returns, albeit with an earlier-stage focus than the more mature markets of Western Europe,” said Howells.
Euroventures Capital launched Euroventures Hungary in 1990, which was the first institutionally backed venture capital fund in Hungary to complete a full investment and divestment cycle – delivering an annualised overall return of 31 percent on its ten investments. It has since advised the ABN AMRO Danube Ventures and Euroventures Danube venture capital funds.
The five-strong Euroventures team is headed by founder and managing director Andras Geszti, who was the founder and first chairman of the Hungarian Venture Capital Association and includes: Thomas Howells (director); Peter Tanczos (director); Ivan Halasz (senior investment adviser); and Laszlo Hradszki (senior investment adviser).
Existing Euroventures’ portfolio companies include: Enigma Solutions, a Hungarian developer of mobile commerce solutions; Fathom Technology, a Budapest-based software outsourcing company; and SkyEurope Airlines, a low-cost airline based in Slovakia and Hungary.