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Predominantly Central and Eastern Europe-Focused Private Equity Funds in Market – November 2013

by Luke Goldsmith

  • 25 Nov 2013
  • PE

Preqin’s Funds in Market shows there are currently 129 private equity funds focused on investing in Central and Eastern Europe (CEE) either exclusively or as part of a wider geographic investment focus. These funds are looking to raise a combined €36bn in aggregate capital commitments. The six largest funds are aiming to garner over a third of all the capital being targeted by CEE-focused vehicles. The largest fund currently in market is the Georgian Co-investment Fund which has a target of $6bn (€4.7bn). It is managed by GCF Partners, seeking investment opportunities arising in energy, tourism and hospitality, agriculture and manufacturing industries.

CEE is currently one of the most overlooked regions for private equity investment. Having emerged from its Communist past during the 1990s, grown and developed in the 2000s, and weathered the recent financial crisis, the region is now an integrated part of the European and global economies; however, this does not show in private equity. There have only been 11 funds to close so far this year which is the lowest number since 2002, when seven CEE-focused vehicles reached a final close. The 11 funds to close in 2013 YTD have collectively raised €1.4bn. It can be noted that there are a number of vehicles anticipating final close before the end of the year which will increase these figures, but it is unlikely to match last year’s total of 24 funds closed raising €4.2bn. The best fundraising year in recent times is 2007 when 55 funds with a focus on CEE raised over €13bn in total capital commitments.

The largest fund to close so far in 2013 is the Abris CEE Mid-Market Fund II which closed on €448mn in February. The fund invests solely in Central and Eastern Europe in various industries. The second largest fund to close is Polish Enterprise Fund VII which is a buyout fund investing into Romania and Poland, with approximately two thirds of its investments made in Poland.

Splitting out the funds in market by type reveals that real estate funds are the most numerous, with 25 funds looking to collect an aggregate €6bn. Buyout funds are looking to gather the largest amount of capital of all fund types with the 22 funds aiming to raise just under €13bn in capital collectively.

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