The proposed project is a private equity fund targeting small and medium-sized enterprises with annual revenue of EUR 10-100 million in the Central and South-eastern European region (new EU members and associate members). Sectors targeted include consumer products, business services, engineering and light manufacturing. The Fund is sponsored by the French banking group Société Générale. The fund will make investments geared towards increasing investee company market share and optimising company productivity through, for example, add-on acquisitions of competitors or the launch of new product or service lines.
Debt financing for companies in the developing Eastern European countries is limited. The equity financing provided by the EBRD and other investors in this project is vital for the sustainable development of these local companies.
EBRD’s role as an investor in the Fund will consolidate other investors and attract more private equity to the region of investment.
As the project will be targeting local SMEs that will be developed and improved with western know-how, there will be opportunities for knowledge and skill transfer from western experts. The competitiveness of investee companies will increase, thereby developing local markets and strengthening the position of local companies to the point that eventually they could compete on an international level.
The French banking group Société Générale will sponsor the Fund, providing 30% to a maximum EUR 50 million of the Fund’s aggregate commitments. The Investment Manager will be the group’s private equity arm, SG AM Alternative Investments S.A., which oversees EUR 1 billion in assets through 11 funds, worldwide, including two Eastern Europe expansion capital funds: Baltic Republics Fund and SG Romania Fund.
The EBRD proposes an equity investment of 20% of the aggregate fund size to a maximum EUR 30 million.
Total fund size is estimated at EUR 200 million for the final closing. The first closing target is EUR 80 million.
This project has been screened FI. The Fund will be required to adopt and implement the EBRD’s Environmental Procedures for Funds which includes compliance with the EBRD’s Environmental Exclusion and Referral List and provision of an Annual Environmental Report. Investee companies will be required to comply, at a minimum, with national standards for environment, health, safety and labour.
Mr. Fabrice CALLET, Managing Director
SG AM Private Equity, Eastern Europe
170, place Henri Regnault,
92043 Paris - La Défense
Tel: +33 (0)1 56 37 79 58;
Fax: +33 (0)1 56 37 86 47
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