DrKC promotes buyouts in Central Europe

Dresdner Kleinwort Capital, the private equity group of Dresdner Kleinwort Wasserstein, which is owned by Allianz, has launched an MBO/MBI network in the Central European region. The network is targeting senior executives in Poland and is modeled on a similar networking idea in the UK. There are already 20 members who are all senior managers and CEOs from Polish businesses who hope to become successful MBO/MBI candidates in the future.

The network has been launched in association with the headhunting firm Pedersen & Partners and will come together at least four times a year to discuss issues relating to management buyouts and buy-ins. Topics covered will include legal issues, taxation, valuation and pricing issues, and corporate re-engineering theories. Members will be prime targets for investors, advisers and headhunters looking for the right executives to take part in MBO/MBI opportunities.

Development of the buyout market in Central Europe has been slow due to limited leverage in the region, but it is hoped this will change. Janusz Heath, managing director of DrKC’s private equity team in Central and Eastern Europe, said: “MBOs/MBIs are already an established way of selling and buying companies in Europe and will be seen in Central Europe before long. The aim of this club is to help entrepreneurs and intrapreneurs prepare themselves with the skills and knowledge they will require to become successful in the MBO/MBI process.”

While the network is limited to Poland at the moment, the firm will be launching similar networks in Hungary and the Czech Republic next year.

Heath is director of DrKC’s $225 million Emerging Europe fund, which recently closed with backing from Dresdner Bank, CalPERS (the Californian Public Employees Retirement Fund), GIMV and Donator. The fund invests between $3 million and $25 million in companies in Central and Eastern Europe. It invests mainly in pan-regional businesses, rollouts, companies requiring expansion and replacement capital; and MBOs/MBIs with the exception of privatisations and turnarounds. The fund focuses on the telecommunications, media, IT/technology, healthcare services, branded consumer products, distribution, retailing and specialist engineering sectors.

Private equity investors with funds raised for investing expansion and buyout capital in Central and Eastern Europe include Advent International, Baring Private Equity, Enterprise Investors, Innova and Private Equity Holdings, through a fund called 5E Holdings, which recently became independent of Bank Vontobel’s private equity operation.