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Hungarian fund holds €51m final close

With plans to invest in Hungary and other CEE countries, Euroventures has held a final close of a €51m fund backed by local and European institutional investors.

Euroventures Hungary III, a new private equity fund targeting the growing, post EU-accession, Hungarian private equity market, has held a final closing on €51 million ($61 million).

Budapest-based Euroventures Capital Advisory held an initial close of the fund on €31 million last year. The fund attracted further commitments from existing investors ABN AMRO Capital, the European Investment Fund (EIF) and the European Bank for Reconstruction & Development (EBRD).

There are still some difficulties around being seen as a co-owner of a business rather than just a lender.

Thomas Howells, director, Euroventures

Euroventures Hungary III received new commitments from funds advised by Lombard Odier Darier Hentsch & Cie and an unnamed Saudi Arabian investment group.

The fund also received a commitment from a Hungarian pension fund CIK, managed by Credit Suisse Life & Pensions. The fund’s structure is the first that allows Hungarian pension funds to invest in the asset class.

In an interview with PEO, Euroventures director Thomas Howells said the firm would look to make investments of between €2 million and €8 million, predominantly in expansion and development opportunities in Hungary and other recent EU entrant countries or those that will accede in 2007.

“The market is too small to be sector specific, so we are generalists,” said Howells. “The region is gaining an understanding of private equity, although there are still some difficulties around being seen as a co-owner of a business rather than just a lender.”

According to Howells, the firm is the only private equity firm in the region with its entire team headquartered in Hungary. The firm has seven investment professionals operating out of the Budapest office, which is led by founder and managing director Andras Geszti.

The firm has made two commitments from the new fund, investing in central European low cost airline operator SkyEurope Airlines and water cooler operator AP Aqua.