White Williams Private Equity Partners this month came to market with a $250 million-targeted first-time fund slated to ferret out investment opportunities in Eastern and Central Europe. Aptly monikered the European Accession Fund, the new investment vehicle is currently being shopped to institutional investors both domestically and in Europe, and is expected to hold an initial close by mid-2002.
The seeds for White Williams’ debut fund actually were planted earlier this year. Created by former Alliance Capital Chairman and CEO Dave Williams and former Alliance Director Reba White Williams, the fund is the successor to East Fund Management, which was established in 1994 by Bank Austria. Later, the bank sold off a portion of its ownership to Alliance Capital, and Williams acquired East Fund Management in its entirety in May.
“When Ms. Williams and I acquired East Fund Management, we did so with the intent of enlarging the company’s investments in Central and Eastern Europe,” said Dave Williams, chairman with White Williams. He resigned from the helm of Alliance Capital back in 1999, and in May relinquished his chairman’s position. Alliance Capital veteran Bruce Calvert now holds both positions at the firm.
The European Accession Fund will target deal flow within the next wave of countries expected to join the European Union, including Poland, the Czech and Slovak Republics, Slovenia and Hungary. It will pump between $15 and $20 million into each deal, investing in mostly consumer-services related plays such as beverage retailers and restaurant franchises. A majority of the transactions will involve companies that require expansion capital to augment their business models.
Assuming the fund reaches its $250 million target, it will likely amass between 15 and 20 portfolio companies by the time it is fully invested.
“As these countries prepare to become eligible to join the European Union, they will go through a reform process, and the result of that is an improved investor environment,” Williams said. “[We also predict] that disposable personal income will grow rapidly, and that the hangover from the communist era, which is a lack of consumer goods and services, will disappear.”
While there are a handful of private equity funds also seeking investment opportunities in Eastern and Central Europe, White Williams’ biggest challenge will likely come as it attempts to get companies there to adopt Western management and corporate governance styles, Williams said. However, he added that he expects those issues to be quickly resolved once the business policies in those countries comes up to speed with the rest of the European Union and, hence, the Western World.
White Williams’ 25 investment professionals will manage the European Accession Fund in partnership with a team of Polish private equity specialists previously employed by Bank Handlowy, a division of Citigroup Inc. based in Poland, and TDA Capital, a private equity firm focused on emerging markets. White Williams’ staff will be evenly split between five different offices in Vienna, Warsaw, Prague, Bucharest and Bratislava.
Robyn Kurdek can be contacted at:Robyn.Kurdek@tfn.com