New Eastern Europe fund for SGAM

SGAM Private Equity, the private equity arm of French financial services group Société Générale, is preparing to raise a €150 million fund to invest in Central and Eastern Europe.

Flageul: new fund expected to close by end of year

According to Alexandre Flageul, investment director for Eastern Europe at SGAM Private Equity, the new fund is “in the process of being launched”. A first close is expected at around €80 million by the end of the year.

Flageul said the fund would target mid-market buyouts and expansion capital investments of €5 million to €15 million, and would mainly cover the Baltic countries, Poland, Czech Republic, Slovakia, Hungary, Slovenia, Romania and Bulgaria.

Commitments to the fund would mainly come from third party investors, said Flaguel, who added that SGAM would provide “30 percent, up to €50 million” of the fund’s capital as an anchor investor.

This is not SGAM Private Equity’s first foray into Central and Eastern Europe. The fundraising follows the sale of Estonia-headquartered Microlink, an IT provider to the Baltic states.

The company, which was sold to Estonian telecom Elion for an undisclosed price, was the final divestment of SGAM Private Equity’s 1994 vintage Baltic Republics Fund. Flageul confirmed that both the Baltic Republics Fund and its other CEE-focused vehicle, the 1997 vintage SG Romania Fund, are now fully realised.

To date, SGAM Private Equity Eastern Europe has managed $150 million of equity capital, invested in more than 35 companies since 1994. The management team operates out of Paris, Bucharest and Prague.