Darby Overseas Investments is expanding its European presence. Darby, a private equity and mezzanine investor and part of Franklin Templeton Investments, has secured €100m in capital to provide mezzanine loans in countries that joined the European Union in 2004. The group will also target those countries aiming for membership in the future, a region stretching from the Baltic to Turkey.
This expansion is the latest stage in Darby’s investment activity in the region. Its European presence began in January 2005 when Allianz AG of Germany and CalPERS selected Darby to take over as the general partner and investment advisor of the US $225m DKB Emerging Europe Fund, a private equity vehicle launched in 2000.
The expansion gives the firm the ability to build a strong mezzanine capability alongside its existing private equity activity in the region and positions Darby as a global provider of private equity and mezzanine financing in all three key emerging market regions of Central Europe, Asia and Latin America.
Richard Frank, chief executive officer of Darby, said: “We believe that countries in Central and South Eastern Europe are a highly attractive market for deploying mezzanine capital. First, they have a favorable investment climate due to continuing superior economic growth and, second, long-term risk capital is being sought both by middle-market companies and by infrastructure projects.”
The headquarters of Darby’s activities in Central and Eastern Europe are in Vienna, where the firm recently opened an office with its parent, Franklin Templeton. Five members of Darby’s CEE investment team, including Robert Graffam, Darby managing director and global head of mezzanine, and Johan Bastin, managing director responsible for mezzanine in the region, are based in Vienna. Three additional members of the team are located in Warsaw and Budapest. Darby is also planning to open an office in Istanbul, Turkey.
Darby has invested $450m in mezzanine transactions in more than 20 companies in Asia and Latin America.