CEE Equity Partners, the advisor of a Chinese-backed USD 500 million private equity fund, estimates it will invest between USD 20 million and USD 50 million in a local project by the end of the year, said Octavian Vidu, the investment manager for Romania at CEE Equity Partners, in a press conference on Tuesday. He said the company is presently considering several local potential projects to invest in. CEE Equity Partners is mainly interested in investing in industry-related infrastructure for sectors such as energy, IT, oil and gas and agriculture and also in specialized production.
The fund, China-CEE Investment Cooperation Fund, was established by the Export Import Bank of China (Eximbank China) in partnership with other investors and has USD 500 million available for investments in 16 countries in the region. Out of this, USD 470 million comes from Eximbank China and the rest from Eximbank Hungary. By year-end, a second fund for the region of USD1 billion will be launched, under the same management.
Poland is the main country of interest for the fund in the region but Romania comes second, said Rafal Andrzejewski, investment director for Poland.
“Romania lacks capital and the crisis has shown that one cannot develop a business by relying solely on bank loans,” said Vidu. While local companies remain somewhat reluctant to partner up with private equity funds, the market is definitely heading in this direction, he added.
The fund invests between USD 20 million and USD 80 million as leveraged buyouts for a period of between five and seven years on average.
Out of the USD 500 million about one third has already been invested in four projects, three energy projects in Poland and one in Hungary where it bought a majority stake in BKF Hungary, the largest private university in the country.
Read more in BR’s next print edition.