Private Equity Activity in Poland – April 2015

by Victoria Pitman

  • 01 Apr 2015
  • PE

In October 2012, Preqin published a blog on private equity fund managers based in Poland. At that time, there were 21 fund managers based in the country, which had accumulated €3.7bn in capital over the decade preceding. Since then, Central and Eastern Europe has faced a number of challenges, not least the continuing conflict between Russia and the Ukraine. Despite its proximity to this conflict, Poland has maintained strong growth figures, with projected growth for 2015 expected to average 3.7%. Additionally, according to Preqin’s Fund Manager Profiles online service, the number of private equity fund managers based in Poland has increased by over a third to 35, reflective of the increased demand for private equity products in the region. 

Of the 35 fund managers based in Poland, 14 focus predominantly on venture capital opportunities and have raised a combined total of €95mn over the last decade. The largest of these managers by capital raised over the last 10 years is Joint Polish Investment Fund (JPIF), which targets opportunities across all stages of the venture capital life cycle in the healthcare and life sciences industries. Preqin’s Funds in Market online service details that JPIF recently held a first close for Joint Polish Investment Fund I on $42mn, the first vehicle in the country to solely target the life sciences industry. 

Firms predominantly targeting a buyout strategy are the second most numerous among fund managers based in Poland, with 12 of the 35 favouring buyout opportunities. Unsurprisingly, buyout managers have raised considerably more capital over the last 10 years than their venture capital counterparts, approaching €3.3bn. Enterprise Investors is the largest buyout fund manager based in Poland, having accumulated nearly €1.1bn for its private equity vehicles over the last decade. The firm closed its last vehicle, Polish Enterprise Fund VII, in 2013 on €314mn. Based in Warsaw, Enterprise Investors invests across Central and Eastern Europe, although the majority of its capital is allocated to opportunities in Poland. 

Despite strong growth and a positive outlook for the future, Poland does have a number of challenges to overcome. Population growth has started to decline, which could have severe long-term impacts on the economic environment within the country. To compound the issue, EU labour laws mean that a significant proportion of working-age Polish citizens are seeking opportunities abroad, resulting in a net outflow of human capital. Efforts have been made to reform labour laws in order to make it easier for immigrants to settle in Poland for the longer term, but it remains to be seen whether this will have the required impact on demographics. If successful, the retention and attraction of working-age citizens will help both to staff private equity fund managers and provide human capital for the businesses in which private equity invests, ensuring the continuation of the positive trends seen in the industry in recent years. 

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