Banque Nationale de Paris (BNP) and BNP Private Equity (BNP PE), the newly formed portfolio management subsidiary of the Banexi Group, in October launched a $135 million (ecu 114 million) fund targeting Central Europe. The two groups, which have committed $20 million to the BNP Central European Partnership Fund, their first private equity vehicle for the region, expect to raise the bulk of the fund from sources in the US. The fund is targeting Poland, Hungary and Romania.
The formation of BNP Private Equity this summer separated Banexi’s private equity and M&A functions. It also marked Banexi’s withdrawal from direct private equity investment. In the future, Banexi will only invest via sponsored funds, which will be managed by separate management companies under the BNP PE holding company umbrella.
Jeffery Grady, vice president of fund management at BNP, said US institutions are likely to view Central Europe, whose currencies have fared better than those of other emerging markets during the recent market upheavals, as an attractive destination for their emerging markets allocations.
BNP Central European Partnership will be deployed in ten to 15 investments throughout its target region in tranches of $6 million to $12 million for either minority or majority stakes, normally alongside the companies’ management teams.
Its investments will be very conservatively structured, typically with a one-to-one debt/equity ratio.
The management team assembled for the fund brings together a group of professionals with extensive fund management experience in Central Europe.
Jeffery Grady, who was formerly part of the team that managed Copernicus Ventures and Jan Laskowski, formerly with Amerbank, will oversee investments in Poland. Laszlo Olah, the former chief investment officer for the Hungarian American Enterprise Fund and the Hungarian Capital Fund, will lead the Hungarian team. Former members of the Romanian American Enterprise Fund’s management team will be responsible for BNP Central European Partnership’s activities in Romania.
Tucker Anthony is acting as placement agent for the fund in the US, marketing the vehicle to institutions with existing emerging market private equity interests.