Enterprise Investors announces the first closing of Polish Enterprise Fund IV
Warsaw, 3 October 2000 — Enterprise Investors, the leading private equity firm in Poland and Central and Eastern Europe, has announced the first closing of its $300 million new fund, Polish Enterprise Fund IV. The first closing of $200 million included eight of the largest and most influential insurance companies, pension funds and financial institutions from the USA and Western Europe, including EBRD, CalPERS, MetLife, New York Life, General Motors Pension Fund, Bank Vontobel, Partners Group, Frank Russell Capital and Enterprise Investors itself. The second and final closing is expected to take place in the first quarter of 2001.
“The objective of Polish Enterprise Fund IV is to give its investors the opportunity to participate in the benefits of the fast-growing Polish and Central European markets,” said Robert G. Faris, president and CEO of Enterprise Investors.
PEF IV will make investments ranging from $3 million up to $25 million in businesses representing different sectors of the economy in which Enterprise Investors has developed significant industry expertise. PEF IV’s target sectors include IT and telecommunications (up to 35% of PEF IV capital), pharmaceuticals and healthcare (up to 25%), consumer goods (up to 15%), industrial products, energy, financial services, and media. The typical holding period of an investment is between three and seven years.
The transactions considered for PEF IV will include expansion capital for private companies, medium to large privatizations, post-privatization investments, turnarounds, selective start-ups, buyouts, and joint ventures with foreign industry partners.
“Polish Enterprise Fund IV will continue the group’s strategy of investing in companies with a solid management team, a strong market position and potential for significant growth and expansion in local and international markets,” said Jacek Siwicki, managing partner of Enterprise Investors.
While PEF IV will focus on Poland, up to 20% of the fund’s capital may be invested in Central and Eastern European countries (Romania, the Czech Republic, Hungary, Bulgaria), so long as the investment opportunities meet the criteria defined by Enterprise Investors.
PEF IV will be managed by Enterprise Investors, the region’s largest and most experienced investment team with a combined total of over 120 years of direct private equity experience. Active in Poland since 1990, EI has developed a solid reputation as well as a strong network of contacts and deal sources both in Poland and the region.
The funds managed by Enterprise Investors – the Polish Enterprise Fund, Polish Private Equity Funds I & II, and the Polish–American Enterprise Fund – are the largest private equity investor in Central and Eastern Europe. The funds have invested over $550 million in more than 70 companies across all economic sectors in Poland and an additional $14 million in Romania. They have exited 33 investments and returned over $400 million to investors.
Enterprise Investors believes that PEF IV will generate attractive returns as a result of Poland’s prospective accession to the European Union. EU membership is expected to accelerate investment activity, expand economic and capital market development in Poland and surrounding countries, and significantly improve the capabilities and experience of local entrepreneurs and management teams. In addition, there will be enhanced exit opportunities fueled by the growing interest of strategic partners, potential listings in Western Europe and improving local stock markets. The targeted level of IRR (internal rate of return) is 30–35%, which also corresponds to EI’s track record.