The Technologieholding Central and Eastern Fund is a ten-year term fund from the initial closing, with an option for two one-year extensions. This fund will invest in small to medium-sized companies in the Information and Communication Technology and Industrial Electronic sector, primarily in central and eastern Europe, with the main emphasis on the Czech Republic, Hungary and Poland.
The Fund aims to achieve long-term capital appreciation from direct investment in small to medium-sized companies in the information and communications technology and industrial electronic sector, primarily in the Czech Republic, Hungary and Poland and, to a lesser extent, in other countries of operations.
The Fund will demonstrate investment opportunities in the innovative high-technological companies of Poland, Hungary and the Czech Republic. It will be the first private equity fund to focus on investments in information and communication and industrial electronic companies in the area. Other private equity funds currently operating in the region do not have the expertise to appraise the potential of this segment of the market. The success of this fund will draw the attention of other specialist technological equity firms, which have conventionally focused on firms in the West, to Central Europe – a region rich in human resources with IT technology and skills.
The Fund will also provide appropriate financing to entrepreneurs in the IT sector without tangible assets for a loan collateral. It is reasonable to expect that the success of this fund will lead to the establishment of other private equity funds focused on sectors with a high human capital component and will expand the financing opportunities in the region. Secondly, the Fund's investments in the IT sector will promote market interactions in other sectors as the expansion of IT-related service companies financed by the Fund can be expected to reduce business transaction costs in various sectors of the economy.
The Fund will be managed by a joint venture owned equally by the Fund's sponsors, TechnologieHolding VC GmbH (Germany) and Sitra Oy (Finland).
The EBRD will subscribe up to US$ 17 million (ECU 14.2 million).
The project size is US$ 50 million at first closing. The maximum size will be US$ 80 million (second closing).
The Fund has agreed to comply with the EBRD’s Environmental Procedures for Private Equity Funds, which include the Bank’s Environmental Exclusion List. Investments will be structured to meet applicable national and EU environmental requirements. It should be noted, however, that there are no specific national, EU or World Bank environmental requirements for most of the Fund’s targeted industry sectors, given their low environmental impact potential.
The Fund Manager will report annually to the Bank on the implementation of the environmental procedures and the environmental performance of its investee companies. As the Fund’s portfolio can be classified as environmentally low risk, the overall environmental impact of this operation is expected to be largely neutral.
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