Ukrainian fund holds first close

Euroventures Ukraine, a private equity firm based in Kiev, has held a first closing of Euroventures Ukraine Fund II (EVU II) on US$35m (E29m).

The fund, which is based in Cyprus, will invest in companies based primarily in Ukraine, as well as opportunistic investments in Russia. The investments will range from US$2m to US$4m of equity and/or quasi equity per transaction. The fund will have a broad sector focus with special emphasis on fast moving consumer goods, distribution, communications, manufacturing and service businesses.

Investors in the fund include the EBRD, the IFC, SECO (State Secretariat for Economic Affairs) and some private investors.

The predecessor fund was created in 1998 with backing of E26.5m from the EBRD, Dutch development bank FMO, and the founding partners of the fund. It is also sponsored by the Dutch Government under its technical assistance program.

To date, EVU I has invested E22.6m in ten companies and has made two full exits and one partial. From the realized investments it has returned 40% of invested capital to investors. Eight portfolio companies remain active and, including realized investments, should generate a projected net IRR to investors of 28% and a cash-on-cash return of 2.2 times.