AIG Capital Partners and Central Europe Trust Company have joined forces for a second time to create E-xcell Communications, a joint venture vehicle that will target Internet-related businesses in Eastern Europe. The company anticipates providing a high level of management support to its investment projects and, where appropriate, will identify and fund acquisition or merger opportunities from both within and outside its portfolio. The joint venture does not have a pre-set overall investment capital, but will invest as needed to fund investment opportunities.
Phillip Lee, chief executive officer of E-xcell Communications, remarks: “The first tranche of investment should be around $30 million, and further capital increases will be based on our success in attracting new investments. As an operating company, rather than a fund, we will not be raising large amounts to bank but will be going to our shareholders as new opportunities arise.”
The Budapest-headquartered business will invest between $1 million and $5 million in each deal and will focus on Poland, the Czech Republic, Slovakia, Hungary and Romania as its main markets. Lee adds that investments of up to $10 million will also be considered. Six months into the project, the company already has over 60 investment opportunities and of these possibilities, the fund hopes to commit to between 12 and 15 over the next 18 months. Average investment size will be up to $12 million.
The first joint venture from the two companies was AIG-CET Capital Advisors Ltd, which manages the $320 million AIG New Europe Fund, one of the largest private equity funds for central Europe. Commenting on the union between the two partners, Lee stated that the funding from AIG brings “significant market clout” while CET, as a European advisory group brings a wealth of knowledge and experience about the market to the venture.