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EBRD extends further equity capital to Polish SMEs
To enhance the role of local financial intermediaries in providing scarce equity capital for small and medium-sized enterprises (SMEs) in Poland, the European Bank for Reconstruction and Development (EBRD) is establishing a US$ 19.8 million (ECU 18.4 million) co-investment facility to be managed by the Polish Fund Advisory and Management Company (FAMCO). FAMCO is a joint venture established in 1997 by Bank Rozwoju Eksportu (BRE) of Poland and Pictet & Cie (Pictet) of Switzerland.
"This co-investment facility will enable the EBRD to provide much-needed long-term equity capital for Polish enterprises," said Kurt Geiger, Co-Director of the EBRD's Financial Institutions team. "Expanding on the work already done by BRE and Pictet, which provide strong local knowledge and international expertise in investment management, the EBRD's co-investment will allow FAMCO to develop further its business and broaden its range of investment activities."
Patrick Vauthey, President of FAMCO, said: "As a new fund management company, this vote of confidence from the EBRD will be invaluable in establishing our track record as a key fund manager in Poland. We have already identified a strong pipeline of potential investee companies and expect to disburse 20 per cent of the Fund on closing."
The EBRD facility will invest alongside an existing fund managed by FAMCO, the Polish Pre-IPO Fund, established in Luxembourg, which has US$ 29.3 million (ECU 27.2 million) in capital. Together, they will provide wholesale equity funding for Polish companies that are too small for the Bank to finance directly. They will principally provide direct investment in companies which intend to seek public listings on the Warsaw Stock Exchange.
This is the eighth fund targeted at Poland in which the EBRD has invested since its inauguration in 1991 and the second in 1998. The EBRD recently announced its investment in the Pioneer Polish Real Estate Fund S.A., the Bank's first involvement in Polish real estate. As of the end of January 1998, the EBRD had committed ECU 1.03 billion in Poland, almost 10 per cent of the Bank's total commitments to date.
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