Waterland Private Equity has opened an office in Warsaw as it ramps up activity in Poland. The office will be led by investment director Dominik Czajewski, according to a statement.
Previously, Czajewski was an interim manager for several Central and Eastern European businesses including PGE, a Polish energy company, and RUCH, a Polish newspaper distribution business. Czajewski has also been head of M&A for LOT, the Polish national airline, and worked as an associate director at AT Kearney, a management consultancy firm.
Waterland invests in sectors with a long term growth trend such as ageing populations, leisure, sustainability and outsourcing. The firm is active in the Netherlands, Belgium, Germany, Austria and Switzerland. Waterland has done add-on acquisitions in Poland in the past, but has never directly targeted Polish opportunities.
The firm started to watch the Polish market last year and believed it had potential, Czajewski told Private Equity International. “We also decided to open an office here because the German, Dutch and Belgium offices received interesting investment proposals from Poland. These are companies with international expansion ambitions that are looking for growth capital,” he said.
Poland has 40m inhabitants and growing spending power
It is perhaps not surprising Waterland has broadened its focus slightly, given deal flow in the Benelux region remains broadly flat, as detailed in a recent Private Equity International issue.
Czajewski, however, said that wasn't the motivation behind the firm's expansion. “I don’t think the euro crisis is the reason for the decision to focus on Poland. The basis for the decision is that it’s an interesting large and developing market. It has 40 million inhabitants and growing spending power and the [economic] slowdown is not as deep as we observe in the other countries,” he said. “Also 20 years of a free market economy created some very interesting companies between €20 million and €200 million, which is the Waterland investment size,” he added.
There are no specific targets on the number of Polish companies the firm will acquire, Czajewski said. All the investments will be made from the €1.1 billion Waterland Private Equity Fund V, which was raised in 2011 in just five months. The original fund target was €900 million. Czajewski, who recently joined the firm, couldn’t comment on whether investors knew about Waterland’s Polish investment aspirations at the time.
In September, Frank Vlayen, a managing principal at Waterland, told Private Equity International, the firm’s capital base had widened and that 25 percent of its capital was now from Asia and Australia. At that time, Fund V was 40 percent deployed.
Vlayen, who named the Benelux and Germany as the firm’s most important markets, said he expects the effects of the current euro crisis to continue into next year. However, he said the firm was relatively optimistic. “These are volatile times but also in volatile times it is possible to do good investments. It’s obviously not easy, you have to do your homework and be cautious. The goal is to find the sectors that are still growing. They are still available.”
In October, Waterland bought an undisclosed stake in Belgium retail group Legio International. The firm has €2.5 billion under management.