Austrian private equity firm Go Equity has reached a final close of EURO54 million on Go Equity II. As with many funds finding it tough to raise capital at the moment, the firm decided to reduce its original target volume of EURO100 million.
The closing culminates a fund raising process that began last year and the final figure is in line with Go Equity’s revised target volume, which was changed because of the general market downturn, said Rene Berger of the firm.
Investors in the fund are mainly European institutional investors including Gerling Insurance, European Investment Fund, Sal Oppenheim, the Raiffeisen Group and City of Zurich Pension Fund. The fund is structured as a 10-year Guernsey limited partnership with a German KG and an Austria KEG as parallel vehicles and has standard terms and conditions.
The fund will provide expansion and development equity capital to Austrian SMEs. Specific sectors include automotive supply, retail and consumer, environmental technology, and synthetic materials all sectors where Go Equity has accumulated significant experience and developed a network of relationships.
Chris Kennedy, who co-ordinated the fund raising activities, summarises the fund’s strategy as investing in locally domiciled companies with the potential to become European or global market leaders. The fund has already made several transactions, which exemplify this investment strategy.
Austria, with a long tradition of debt capital financing for businesses has an underdeveloped, but rapidly expanding private equity market. Kennedy explains the attractiveness of the regional market: “Deals are acquired cheaply in a relatively non-competitive process.”
Go Equity launched GoE II to build on the success of its maiden fund the Austrian Private Equity Fund (APEF). Established in 1997, APEF was an early mover in the nascent Austrian private equity market and is fully invested. The fund has already realised several times its initial investments.