Barings Private Equity Partners (BPEP) and Communications Equity Associates in September held a $70 million (ecu 59 million) final close for Baring Communications Equity Emerging Europe (BCEE). Focusing on Central and Eastern Europe, BCEE is the joint venture partners’ third specialist media fund and complements vehicles targeting Western European and Asian media and telecommunications companies.
Although the fund was $20 million oversubscribed at its final close, fund raising has been a long haul. BCEE was launched in January 1997 and scored a $42 million first close in September of that year.
Since then, investors including Bank Vontobel, Chase Manhattan and the Crescendo World Fund have signed commitments, joining the initial investor line-up of ING Bank, the European Bank for Reconstruction and Development, Commercial Capital of Greece, UIS International of Sweden, Korea Long Term Credit Bank and Toronto Dominion Bank. A number of private individuals have also participated in BCEE, including David Graham, who also supported the Baring/CEA Western European Fund.
The fund will invest approximately 70% of its capital in Poland, Hungary, the Czech Republic, Slovakia, Slovenia and the Baltic States, with the balance slated for the Commonwealth of Independent States and Romania.
Addressing potential concerns about the Eastern European economy arising from Russia’s recent troubles, BPEP partner Heather Potter said countries such as Poland, with growing gross domestic products and large population bases, which are increasingly aligned with the West, may provide better investment opportunities than markets like Ukraine, whose economy is still closely linked with Russia. Nevertheless, BCEE will continue to evaluate opportunities throughout the whole of its target region.
The fund is already one-third invested, having completed deals in the Czech Republic, Hungary, Poland and Romania. Its most recent investment was in Atomic Media Corp., a music television group active in Poland and Romania.