The GED Private Equity Group, Bank Austria-Creditanstalt and Caja Madrid have signed an agreement to promote a fund of up to 100 million euros for the countries in the region of Southeastern Europe. The experience and profitability achieved by GED in Romania constitute the best guarantee for the launch of the new fund within the region, the group officials said.
"Our objective when we came to Romania, eight years ago, was to demonstrate that private equity undertaken by professionals using western criteria for investing and management, could produce good returns for investors. The support for our new fund by two prestigious banks is good evidence that we are achieving that goal," Robert Luke, general manager for Romania of GED Capital told Ziarul Financiar. "We are delighted to be able to continue to support Romanian, and now Bulgarian businesses in their profitable growth," Luke added.
Caja Madrid, along with Bank Austria-Creditanstalt has signed an agreement with GED Capital Development, a company part of the GED Group, for the promotion of a private equity fund for the Southeastern region of Europe, which basically includes Romania, Bulgaria and their neighbouring countries. Between the two sponsors, they will contribute 20 million euros, and the fund is expected to reach 100 million euros. The remaining contributions will come from private investors, as well as the multilateral institutions that perform activities in the region (the European Bank for Reconstruction and Development, FEI, IFC etc.).
The new fund is intended for medium-sized companies with a good potential for expansion in the region. The transactions will amount from three to ten million euros and will have an average lifespan of five years.
The GED Group is hereby taking advantage of its experience in Romania, a country where it started carrying out activities in 1996 by making investments through the management of 54 million euros through the GED Eastern Fund I-RPPF. In addition to the Madrid office, GED has a presence in Bucharest and has already invested in 12 companies within the area, out of which four have been sold with a gross IRR of 30% in dollars. The group thus estimates highly satisfactory profitability for this first fund.
"We are very proud that a Spanish private equity group such as GED is presently one of the top private equity companies in Eastern Europe. The agreement reached with Caja Madrid to promote the new fund will allow us to contribute the experience we have acquired in Romania and expand upon our leadership in the region through new investments," said Enrique Centelles, president of the GED Group.
In its turn, Caja Madrid intends to gain greater knowledge of the region, as well as favouring the approach by Spanish medium-sized companies towards Eastern Europe, an area which is being gradually integrated into the European Union, with growth levels far above the European average.
laurentiu.ispir@zf.ro
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