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Central and Eastern Europe: August 2003

Adriatic fund holds first close, the Carlyle Group launches Russian fund and Aventures launches technology fund in the Ukraine…

US Carlyle to launch Russian private equity fund
US Carlyle Group is to launch a $500m private equity fund for Russia alongside Russian business conglomerate Alfa. The two sides are believed to be close to signing a deal. Both parties will initially contribute $250m in a joint venture aimed at capitalising on Russia's restructuring economy, according to the Financial Times. The deal between Carlyle and Alfa comes despite political uncertainty in the run up to elections in Russia. But despite a poorly developed banking sector and stock exchange, the country has experienced one of the highest rates of growth of any large country in 2003.
AltAssets 28.8.03

DBG Eastern Europe completes first transaction from new fund
DBG Eastern Europe has completed its first investment from its newly established E67m Central and Eastern Europe-focused private equity fund. DBG Eastern Europe II has backed the management buy-out of Ergis, one of Poland's leading plastics producers, from several national investment funds. DBG Eastern Europe currently manages over E100m. Its family of funds is organised to make equity investments in Central and Eastern European countries, with an anchor presence in the Czech Republic, Hungary and Poland. The firm also makes investments in Bulgaria, Croatia, Estonia, Latvia, Lithuania, Romania, Serbia, Slovakia and Slovenia. DBG focuses on later stage investments such as expansion financing, management buy-outs and buy-ins and industry consolidation transactions.
AltAssets 29.8.03

Adriatic fund holds E30m first close
Poteza, a Slovenia-based broker, has held a first close on a E30m fund to invest in the South East European states of Slovenia, Croatia, Serbia & Montenegro and Bosnia & Hertzegovina. It is targeting E75m and has so far secured investments from approximately a dozen financial and industrial groups in Slovenia. Poteza is now looking to secure capital from a number of international investors. The firm plans to invest in buy-outs, restructurings and expansion capital transactions in the South East European states, as well as possibly looking at markets such as Bulgaria and Romania. It looks at investments in industries that have succeeded at an earlier stage and in more advanced transition countries.
PrivateEquityOnline 22.8.03

Ukrainian Aventures launches $50m high-tech fund
Ukrainian venture capital firm Aventures has launched a $50m technology fund, with commitments already secured from a number of local investors and one US investor. Aventures is co-sponsoring the fund with the National Space Agency of Ukraine and several other Ukrainian government agencies. The fund will invest in innovative companies across a diversified spectrum of high-tech sectors in Ukraine. It will focus on dynamically growing tech-based companies that have potential to become market leaders in the region and that produce innovative products for Western markets. As part of its fundraising efforts, Aventures is going out on a road show to the US in November this year to secure further commitments from US investors. The firm will be bringing about 20 of the fund's potential investee companies to the US to present them to potential investors.
AltAssets 7.8.03

AIG and Interros to launch private equity fund for Russia
US insurance group AIG and Russian investment group Interros are to launch a $300m private equity fund dedicated to the former counties of the Soviet Union. The joint venture will also include an additional $250m real estate fund. Both funds are to be launched at the end of this year with AIG and Interros each providing a cornerstone commitment of at least $50m. Andrei Bugrov, Interros deputy director, described the funds' launch as an indication of growing investor confidence in the Russian market. AIG agreed, saying the deal indicates a shift in Russian managers' approach to asset management over the past decade. AIG has sponsored 33 private equity funds to date and has committed capital in excess of $10.6bn. The firm's presence in Russia dates back to the time of the former Soviet Union, when the company was involved in several large-scale insurance projects. In 1994, it launched AIG Russia and AIG life insurance companies a well as the Russian-American Investment Bank.
AltAssets 4.8.03