Investors committed $800mn (€646mn) to the China-CEE Investment Cooperation Fund II. The firm announced the first closing of the fund, but expects further commitments to boost its size to $1bn later this year, CEE Equity Partners, which serves as investment advisor to the fund, said on April 17.
The fund is the second CEE-focussed investment vehicle built by China’s Exim Bank in partnership with institutional investors from the region. The fund will seek investment opportunities in the same sectors targeted by the debut fund — manufacturing, infrastructure, energy, and telecommunications — but will also widen its focus to look for opportunities in healthcare, tourism, education, and agriculture.
The value of a typical equity investment ranges from $20mn to $100mn with additional debt financing whenever appropriate, CEE Equity Partners said. The investment horizon is five to eight years.
The company also said it has opened a new CEE office in Prague that will cover Czechia and Slovakia.
“The new capital secured for Fund II demonstrates the commitment of our global investors to our strategy and approach,” commented Tomáš Čása, newly appointed investment manager for the Czech Republic and Slovakia. He joined the firm after seven years at Genesis Capital, an SME-oriented fund advisor based in the Czech Republic.
“We are currently looking at a number of potential investments across various industries in the Czech Republic and Slovakia, seeing opportunities arising from succession-driven transactions, as well as from continuing market activity of strategic and financial investors. In particular, specific opportunities recently appeared in manufacturing, engineering and the healthcare sector,” Čása added.
CEE Equity Partners already has offices in Bucharest, Budapest, Warsaw and Zagreb, and said in an interview with bne IntelliNews in 2015 that it covers 16 countries across the Central and Southeast Europe region from Estonia in the north to Albania in the south, and that its Chinese partners were keen to expand the geographic spread of its investments.
The first China-CEE Investment Cooperation fund was set up in 2014 and initially closed with $435mn in commitments. Today the firm says it has with committed funds of over $1.2bn. The first fund invested in companies such as Polish insulin maker Bioton, Polish power company Polenergia, the Budapest Metropolitan University, and Slovenian outdoor lighting firm Javna Razsvetljava.