While much of the globe is preoccupied with the divisions in the world recently, at least one private equity firm is banking on unity. New York-based White Williams Private Equity Partners is preparing to launch a new fund that will make its investments in Central European countries expected to join the European Union.
The fund was formed “in the belief that the process of becoming an EU member creates forces for reform of economic policy, regulation regarding capital markets, legal systems – all the things that eventually lead to a more favorable investment environment,” said Dave Williams, founder of White Williams.
The European Accession Fund LP, with a target of $250 million, is expected to have a long fund-raising period and will likely not begin investing until “well into next year,” said Williams.
At present, the firm is on the prowl for a placement agent that will be able to draw investors from both Europe and the U.S. However, Williams said most of the funds limited partners will probably derive from Europe. “I think right now our prospects look better in Europe because the belief in the accession process is most strongly understood and held in Europe,” he said.
Countries on the brink of EU membership, such as the Czech Republic, Bulgaria, Hungary, Poland and Romania will be the target of the fund, which will seek investments of $15 million to $20 million in businesses with annual revenues of $50 million to $100 million. The fund plans to buy mainly majority stakes in businesses in consumer goods and services, with the strategy to sell to strategic buyers, namely multinationals, after a three-to-five year investment horizon.
“Consumer disposable income will be the most rapidly growing economic factor in the region as incomes move toward western levels,” said Williams. “We hope and expect that as economic conditions improve in these countries, international companies will be interested in expanding into the region, and that the companies in which we invest will be attractive acquisition candidates.”
The European Accession Fund stems from a buyout by Williams and his wife, Reba White Williams, of East Fund Management, a subsidiary of Alliance Capital that was already active in Eastern Europe. Bank Austria started East Fund, based in Vienna, in 1994 and later shared ownership with Alliance Capital.
Professionals from the East Fund team, including lead portfolio managers Philip Wille and Roland Haas, will invest the White Williams fund, in tandem with a team of senior investors, based in Warsaw. Heading the Polish team are Pawel Gemoch and Prucmek Krych. White Williams Private Equity Partners has additional offices in Vienna, Prague, Bucharest, Romania and Bratislava, Slovakia.