Lead Equities has strong first close

The Austrian private equity house has raised E40m at the first close of its fund targeting later-stage opportunities in Central and Eastern Europe.

Austrian private equity firm Lead Equities has continued the recent trend for successful fundraising in Europe, holding a first close on its Lead Equities I fund at E40m, the amount originally targeted for the fund’s final close.


The success of the fund is also noteworthy because it is the first fund to be raised by the firm, although not by the company’s founding partners. Dirk Brandis is a former founding partner of Schroder German Buy-Out Fund I and has acted as advisor and co-investor with Cinven, while Stephan Zöchling has previously worked for HSBC and Constantia Privatbank in senior roles.


Austrian private equity funds are rarely a focus for international investment institutions which tend to focus on German and Swiss funds in the region. The majority of the capital for Lead Equities I was provided by major Austrian financial institutions, including Investkredit, Generali Insurance Holdings and Hypo Alpe-Adria. Lead Equities' management have also contributed to the fund.


A spokesperson for Lead Equities said that the firm had not set a target beyond the original E40m, but that fundraising would continue into 2003. The fund will look to invest between E1.5m and E10m in later-stage companies with an enterprise value of between E10m and E100m and will look to syndicate larger deals. It will focus on automotive, engineering, health care and consumer opportunities in Austria, Southern Germany and Northern Italy, and in Eastern Europe in Slovenia, Slovakia, the Czech Republic and Hungary.


According to a company spokesperson, Lead Equities has yet to make an investment, although several projects are currently in the pipeline. One attraction for investing in formerly centrally-planned economies is that asset prices remain low, meaning a relatively small amount of capital can go much further than when investing in companies in western European markets.


The successful close is likely to act as a timely boost to Austria’s private equity industry. In October 2002, Go Equity, also based in Vienna, fell short of a E100m target for its second fund, raising E54m.