Poland Lures Private Equity With $737 Million Co-Investment Plan
Poland Lures Private Equity With $737 Million Co-Investment Plan
(Bloomberg) -- Poland’s government wants to boost private investment in the country’s small companies, and it’s putting up 2.8 billion zloty ($737 million) of public money to prime the pump.
The Polish Development Fund plans to invest 2.2 billion zloty jointly with private-equity and venture-capital firms, Annemarie Dalka, head of private-equity investments at the fund, said in an interview in Warsaw. Another 600 million zloty will go into a so-called fund of funds intended to kickstart investment in midsize companies.
Major private-equity firms including CVC Capital Partners Europe Ltd and Permira Holdings LLP have made multi-billion-dollar deals in Poland in recent years, but smaller companies have struggled to find investors. The development fund will therefore target that segment of the market and seek out private-equity firms that invest at least half their money in Poland.
“We’re seeing firms grow bigger and their partners chase larger targets, so we want to stimulate the mid-cap segment that’s best-suited to Poland’s needs,” Dalka said.
The push to attract private-equity investment coincides with a new pension program that could provide as much as $2 billion in funding for companies and reinvigorate the equity and debt markets. Under the program, pension funds will be allowed to invest as much as 10% of their assets in private-equity funds.
‘Future Unicorns’
The development fund, known by its Polish initials PFR, has already contributed into the Accession Mezzanine Capital IV fund run by Mezzanine Management. AMC IV, which closed last November with capital commitments of 264 million euros ($295 million), invests in mid-market companies in central Europe.
On top of that, PFR has committed an undisclosed amount to a 91 million euro fund run by lower-mid market buyout manager Value4Capital. The state authority is also in talks on potential investments with other firms, Dalka said.
On the venture capital side, PFR money helped attract Finch Capital to look at Polish tech companies. Aman Ghei, a principal at Finch, said by email that the firm sees Poland as an up-and-coming European hub for fintech and deeptech companies after the country has welcomed IT centers run by multinational companies.
“The talent available in this market is what is exciting to us as we meet bolder and more ambitious entrepreneurs willing to take risk and build future unicorns,” Ghei said. “PFR provides a fantastic gateway for us to be even more closely involved in the ecosystem.”
To contact the reporter on this story: Konrad Krasuski in Warsaw at kkrasuski@bloomberg.net
To contact the editors responsible for this story: Celeste Perri at cperri@bloomberg.net, Patrick Henry, Piotr Bujnicki
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