Enterprise Investors closes largest Central European fund

Enterprise Investors has reached a final close on the €300m Polish Enterprise Fund V, the largest private equity fund raised in Central Europe to date.

The Warsaw-based firm launched the fund in January 2004 and reached a first close in February. It will focus primarily on buyouts and expansion capital in the financial services, consumer products, telecoms, retail, healthcare, manufacturing and environmental sectors.

It will target investments between €3m and €45m in Poland, but up to 30% of its capital may be invested in other central European countries such as Romania, Slovakia, the Czech Republic, Hungary, Bulgaria and the Baltic countries.

Investors in the fund include Alpinvest, Bank Austria Creditanstalt, CalPERS, EBRD, EIF, MetLife, Partners Group and other US and European investors.

Since the first close, Enterprise Investors has made two investments. The first was a €26m investment for a 75% stake in Harper Hygienics in May. In June, as part of the Advent International-led consortium Viva Ventures, it purchased a 65% stake in the Bulgarian Telecommunications Company at around €750m.

The firm’s most recent exits are Stomil Sanok, a Polish manufacturer of technical rubber products, sold in November 2003 for $59m, earning a return of 6.8x, and pharmaceutical company Polfa Kutno, sold in September 2003 for $76m, representing a multiple of 5.4x.

The firm is currently in the process of exiting Apteki Polskie, a chain of pharmacies, pending approval from the Polish antimonopoly office. The multiple of cost will exceed 2x.