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EBRD's newest regional private equity fund will help small and medium-sized enterprises
To assist small and medium-sized enterprises in central and eastern Europe, the European Bank for Reconstruction and Development (EBRD) has arranged a DM 20 million (ECU 10.3 million) investment in a private equity fund, DBG Osteuropa Holding GmbH (DBG). The fund has been co-financed with Deutsche Bank AG, the sponsor of the fund, Mitsubishi International GmbH and Deutsche Investitions und Entwicklungsgesellschaft mbH (DEG) and is intended to develop equity investments in the Czech Republic, Hungary, Poland and the Slovak Republic.
"By investing in the fund, the EBRD will contribute towards the need for long-term financing and equity capital in the Visegrad countries. The investment will strengthen local institutions and significantly increase the ability of the investee companies to expand their operations," said David Hexter, Deputy Vice President at the EBRD. "This is also the first time that the EBRD catalyses foreign direct investment from the German "Mittelstand" (medium-sized enterprises) to mid-sized companies in the region."
"We are pleased to have received the support of the EBRD and other institutional investors for this fund and we intend to build a premier investment management organisation in central and eastern Europe," said James O'Neill, Chief Executive Officer and Managing Director of the DBG Development Capital Eastern Europe Ltd.
The fund is a 10-year limited liability company with a total capitalisation of DM 90 million (ECU 46.3 million). It will seek to maximise capital growth through its equity investments by focusing on taking significant stakes in private medium-sized companies, where equity financing is still short of demand.
DBG Development Capital Eastern Europe Ltd., the Investment Manager, will carry out the Fund's objectives through later-stage equity investments, including privatisation capital, management buy-outs and buy-ins, expansion capital for private companies, private joint ventures and industry consolidations.
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