Darby expands European presence

The emerging markets-focused investment firm is targeting Central and Eastern European countries as it extends its mezzanine financing operations.

US-based emerging markets private equity firm Darby Overseas Investments has allocated €100 million ($119 million) to the provision of mezzanine loans in countries that joined the European Union in 2004 as well as those looking to join in the future.

Darby recently opened an office in Vienna with its parent company, Franklin Templeton Investments, which acquired Darby for around $75 million in August 2003.

The firm’s CEE activities will be managed by five members of its investment team. Robert Graffam, Darby managing director and global head of mezzanine, and Johan Bastin, managing director for mezzanine in the region, will be based in the Vienna office; three additional members of the team will be located in Warsaw and Budapest.

According to a statement, Darby also plans to open an office in Istanbul, Turkey.

Darby launched its European activities in January of this year when German insurance group Allianz and US pension fund CalPERS chose Darby as general manager and investment advisor of the $225 million Dresdner Kleinwort Benson (DKB) Emerging Europe Fund, which launched in 2000.

Nicholas Brady, chairman of Darby, said in the statement: “This gives us the ability to build a strong mezzanine capability alongside our existing private equity activity in the region. We are now positioned as a global provider of private equity and mezzanine financing in all three key emerging market regions of Central Europe, Asia and Latin America.”

In 1999, Darby launched the $195 million Darby Latin American Mezzanine Fund (DLAMF), the first dedicated mezzanine fund operating in Latin America, according to the firm. In 2002, Darby acquired the $246 million Asian Infrastructure Mezzanine Capital Fund (AIMCF) from Prudential Financial.

Darby has invested $450 million in mezzanine finance to more than 20 companies in Asia and Latin America to date.