Krokus raises €100m for Polish fund(3)

Warsaw-based Krokus Private Equity has closed its fourth fund on €100 million – exceeding its target of €75 million – as Poland becomes a more attractive destination for private equity capital.

Krokus Private Equity, a Polish private equity firm, has raised €100 million ($134 million) for its latest fund. The fund is the firm’s fourth overall fund but its first since its own buyout from former parent AIB in 2006.

Nova Polonia Natexis II Private Equity Fund will target expansion and buyout opportunities in Poland’s mid-market. It will invest between €3 million and €10 million of equity in companies with an enterprise value of between €3 million and €30 million.

Witold Radwanski, chief executive of Krokus, said: “Krokus is deliberately positioned at the smaller end of the Polish private equity market as there is less competition for deals and valuations remain reasonable. We were particularly keen not to raise a larger fund as this would have taken us out of this investment space.”

The fund has committed nearly €13 million in two investments to date. One of these is a 74 percent stake in Izoterm, a provider of thermoinsulation for buildings in the Polish, Slovakian and Czech markets, that it bought in January. The other is a 79 percent stake in Transsystem, a supplier of conveyor systems in Europe, that it bought in May.

Natixis Private Equity was the cornerstone investor in the fund, while other investors include the European Bank for Reconstruction and Development, InvestKredit, Suomi Mutual Life Assurance Company and Amanda Capital. Acanthus acted as placement agent.

Poland has become a more attractive investment destination for private equity funds. 23 private equity deals happened in the country in 2006, up from just 14 deals in 2005, according to Dealogic.

Said Radwanski: “The Polish mid-market represents an exceptional investment opportunity at this moment in time. There are a growing number of well-managed companies in Poland looking to continue their growth with new investors alongside existing management teams.”