Advent International, a global private equity firm, has closed its fourth Central and Eastern European fund on €1 billion ($1.6 billion) at its hard cap. The fund is triple Advent’s previous fund in 2005, which raised €330 million.
Rival firm Mid Europa Partners’ €1.53 billion fund, raised last year, still holds the region’s crown. Joanna James, an Advent managing partner, said the firm had deliberately decided to raise less than Mid Europa targeting a €750 million fund. The fund was modestly oversubscribed above the hard cap and significantly oversubscribed above the target, she said.
“We wanted to be in a slightly different part of the market to Mid Europa, which is a reflection of the types of deals we are seeing and we feel comfortable doing. We tend to be pioneers and we like to get the opportunity to look at things on a proprietary basis rather than go into auctions.”
Advent has local teams in four countries across the region and the firm raised its first regional fund in 1994. Since then, it has financed 35 companies in Poland, the Czech and Slovak Republics, Hungary, Romania, Bulgaria and Turkey.
James said: “One of the big differences in this fundraising has been the interest from the US where nearly a quarter of the investments came from, as opposed to virtually nothing in the 2005 fund.”
The fund will invest €30 million to €100 million of equity in each transaction, while for larger deals Advent will also use its global funds, the latest of which closed on €6.6 billion this month.
In the previous three years Advent has backed eight companies in five CEE countries and has exited, or partially exited, seven investments including its involvement in a consortium, which sold the Bulgaria Telecommunications Company to AIG Capital Partners for €1.66 billion last year. Advent International and partners bought the company in 2004 for €230 million.
Four of the largest investors in the fund are GIC Special Investments, the Singapore sovereign wealth fund, AlpInvest Partners, a Dutch limited partner, California State Teachers’ Retirement System, the US pension fund, and the EBRD, the Central and Eastern European development bank.