Tough market hampers Go Equity fundraising

The Austrian private equity house fell some way short of its original E100m target for its latest fund investing in Austrian SMEs.

Go Equity, the Austrian private equity investor, has held a final close of Go Equity II, its second private equity fund.

The fund has raised E54m, just over half the original E100m, in what Go Equity director Chris Kennedy described as an ‘extremely challenging’ fundraising environment.

Investors in the fund include Gerling Insurance, European Investment Fund, Sal Oppenheim, the Raiffeisen Group and City of Zurich Pension Fund.

The firm is planning to make 15 to 20 development capital investments with equity commitments ranging between E3m and E5m. Of particular interest to the fund are opportunities with a regional focus, where the firm believes it can maximise returns.

Despite the lower than projected final close, Kennedy said that the firm was optimistic about opportunities in the Austrian market. “We’ve identified 6,000 businesses in Austria with turnovers of between E5m and E50m. As one of the few players in the sector, we will have access to the best opportunities. Although we’re a generalist fund, we are looking to make investments in automotive supply, synthetic materials and retail and consumer.”

Kennedy said that raising capital for the second fund had been hard hit by the poor performance of the public markets, which had seen institutions reduce their allocations to private equity in order to reflect the reduction in valuation of the public sector investments. “Although investors were aware of our first fund, Austria Private Equity Fund, potential investors proved wary of committing to funds in which they hadn’t previously invested.”

 The fund has already completed several transactions, including a E4m investment in Vienna-based internet services company SolveDirect.