Mid Europa readies region's largest buyout fund
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VIENNA (Reuters) - Private equity firm Mid Europa Partners is set to close a 1.5 billion euro ($2.1 billion) fund, ahead of its original goal and by far the largest devoted to the central European region, its managing partner said on Tuesday.
The fund -- Mid Europa's third -- has "significantly more" Middle Eastern and Asian investors than in the past, though remains dominated by Europeans, Thierry Baudon told the Reuters Central European Investment Summit.
About 20-25 percent of the fund comes from the United States, another quarter from Middle East and Asia and half from Europe, he said.
The firm, which owns Austrian mobile operator One and Polish health care provider Lux-Med, had originally set a 1.25 billion euro cap on the fund, but extended it because of demand, Baudon said. Its first close was in September at about 1 billion euros, after a May launch.
The fundraising took place during a global credit and liquidity crunch that has put a stranglehold on the private equity sector.
Baudon said central Europe has been insulated from some of those troubles because of the region's continued growth rate and lower debt to EBITDA buyout ratios, among other factors that make it different than historically high-growth areas.
"I have macroeconomic predictability," Baudon said.
"What has killed private equity in other emerging markets was macro shocks," he added. "We do not face that issue. It makes a tremendous difference in terms of the attractiveness of private equity in this region.
"The only variable that we gradually adjust is, effectively, the exchange rate. Until they join the euro zone, their currencies are bound to appreciate."
Such visibility has helped attract more western private equity firms to the region, where Baudon has been focused for two decades. He doesn't see the growing competition affecting his ability to find deals, however.
"If you look at the amount of private equity money that is being directed to this region as a part of GDP, it is miniscule," he said. "We probably account for a huge proportion. Anything which brings the level of private equity interest to the level of the west is good for the region."
(For summit blog: summitnotebook.reuters.com/)
