Alpha raises €109m for CEE fund

Alpha Associates, a Swiss private equity fund of funds manager, has raised €109m for a first close of its €300m targeted second Central and Eastern Europe-focused fund of funds.

Alpha Associates, a Swiss private equity firm, has held a first close of its second central and eastern Europe-focused private equity fund of funds with €109 million ($140 million) of commitments.

Petra Salesny, partner at Alpha Associates, said that Alpha CEE II has a target of €300 million and a hard cap of €400 million. Salesny added that the fund is expected to make a second and possibly final close before the end of the year.

Salesny: tapping into US and Middle East interest in Central and Eastern Europe

“There has been a lot of interest from both the US and the Middle East as well, which we want to tap into for the second closing,” said Salesny. “We currently have a number of investors in due diligence.”

Investors in Alpha CEE II include the European Bank for Reconstruction and Development, a special purpose vehicle arranged by Merrill Lynch, as well as unnamed insurance companies, banks and family offices.

Salesny said that the fund would exploit current opportunities for private equity in central and eastern Europe “arising from the dynamics of EU accession of the countries in the region and the strong growth. The focus will be on late stage expansion financing and buyouts”.

The second fund will follow a similar strategy to its predecessor, 5E Holding, a limited company set up as an evergreen structure to reinves portfolio proceeds. “Alpha CEE II is primarily a fund of funds, but there is a three-fold strategy where we also have secondary opportunities sourced and negotiated on a private bases, as well as opportunities to co-invest with fund managers,” said Salesny.

Alpha CEE II will make approximately ten primary fund investments, said Salesny. In addition, twenty to forty percent of the fund will be allocated to secondary investments and a further ten to thirty percent to direct co-investments.

Based in Zurich, Alpha Associates span out of Swiss Private Equity Partners in April 2004 following Swiss Life’s decision to withdraw from the asset class.