Polish–American Enterprise Fund transfers $60m to the Polish–American Freedom Foundation
Warsaw, 7 January 2004 — The Polish-American Enterprise Fund (PAEF) has transferred $60m to the Polish-American Freedom Foundation (PAFF). This contribution increases PAFF’s endowment to over $200m, reinforcing the foundation’s position as a leading institution of its kind in Central and Eastern Europe. A ceremony marking the transfer was held in Warsaw on 7 January 2004. Among those present were Prof. Jerzy Hausner, Deputy Prime Minister and Minister of Economy, Labor and Social Policy, as well as Prof. Leszek Balcerowicz, president of the National Bank of Poland, and Prof. Adam Daniel Rotfeld, Secretary of State, Ministry of Foreign Affairs.
The Polish–American Enterprise Fund was founded in 1990 on the initiative of the US Congress, following President George Bush’s visit to Poland the previous year. PAEF’s objective was to support the development of the market economy in Poland through loan programs, capital projects, and training assistance. The United States transferred $262m to the Enterprise Fund at that time.
Throughout the 1990s, the Polish–American Enterprise Fund was one of the major investors in Poland, contributing to the success of many thousands of private Polish companies. Moreover, it was the only one of 14 enterprise funds established in Central and Eastern Europe on the initiative of the US Congress to both maintain the capital entrusted to it and even increase those assets (to over $350m). In 1999, in recognition of its contribution to the development of the Polish economy, PAEF was presented with the Special Economy Award by the president of the Republic of Poland.
PAEF’s assets are managed by Enterprise Investors (EI), the leading private equity firm in Poland and the region. EI has invested $700m in Poland to date, and has supported the development of approximately 100 companies from various sectors through its direct investments. PAEF’s success led to the establishment of other investment funds managed by EI: Polish Private Equity Funds I & II (1992, with total equity of $151m); the Polish Enterprise Fund (1997, $164m); and Polish Enterprise Fund IV (2000, $217m).
In view of PAEF’s success in achieving its objectives, the US government decided to close the fund. Half of PAEF’s initial capital was returned to the US Treasury in 2000-01, while the remaining funds were set aside for the endowment of the Polish–American Freedom Foundation.
The new foundation was established in Poland in 1999 and started operating in 2000. Its mission is to reinforce civil society, democracy and the market economy in Poland, and in particular, to equalize opportunities for individual and social development, and to share Polish transformation experiences with other countries of Central and Eastern Europe.
PAFF’s programs are financed with revenue generated by its endowment. In less than four years the foundation has received $209m from PAEF and has disbursed over $14m toward its programs.