MBO at Austria’s Invest Equity

Austrian private equity firm Invest Equity has changed its ownership structure in a move it hopes will appeal to international investors as it continues to raise its latest fund.

Vienna-based Invest Equity has announced a change in its ownership structure, as it attempts to attract more international investors to its Greater Europe Fund (GEF), which it is currently raising.

The firm’s four partners – Martin Prohazka, Helmut Bousek, Joergen Hausberger and Guenter Lessig – have acquired 70 percent of the shares in Invest Equity Management Consulting (IEMC). IEMC is the firm’s management company, which manages and advises Invest Equity funds.

IEMC was previously 75 percent owned by investors in Invest Equity’s first fund, Invest Equity Beteiligungs (IEB), which the firm raised in 1999 and which is now fully invested. Listed Austrian bank InvestKredit Bank, which held the remaining 25 percent of IEMC, has acquired a further five percent to raise its holding to 30 percent.

“With the clear majority held by the active partners, Invest Equity now conforms to the best practice for European private equity firms,” said Prohazka. “On the other hand, Investkredit Bank’s participation is a token of its ongoing commitment as an investor and strategic partner.”

Prohazka says the level of independence that the Invest Equity team now has is unusual in the Austrian market, where the majority of private equity firms are captive, frequently owned by one bank and fully funded by the sole owner.

GEF, Invest Equity’s second fund, was launched in January 2004 and posted a first closing on €44 million in September. The majority of the capital at that stage was committed by Austrian institutions including InvestKredit Bank, Österreichische Volksbanken and insurer Merkur Versicherung.

The fund is now seeking more international investors, having targeted a final closing in the summer of 2005. Natexis Private Equity of France and German fund of funds NORD KB Beteiligungs have already made commitments to the fund, which has not specified a target amount.

GEF will primarily acquire mid-market companies in Austria and Southern Germany as well as co-investing in the Czech Republic, Slovakia, Hungary and Slovenia alongside local private equity firms.

Invest Equity’s debut IEB fund closed on €49 million in 1999.