POLAND EMERGING GROWTH FUND

cancelled

Central Poland Fund and Poland Emerging Growth Fund are two private equity funds proposing to invest in private or privatising small and medium-sized enterprises in Poland. Project objectives: To provide wholesale equity finance to companies which are too small to be eligible for direct EBRD financing and to support the development of LMG, a prospective local Polish fund manager. With both CPF and PEGF, the majority of investments will be private equity investments, where the proceeds support the company's privatisation or are invested in the company and used to finance specific investment programmes. PEGF: To date, the EBRD has invested in funds which broadly invest in private equities in its countries of operations. PEGF will focus on the companies which are expected to utilise the stock market to raise capital. It will operate among medium-sized Polish companies which can be taken public in the medium term. This is a market which is now underserved in Poland and in which significant activity is expected. CPF: To facilitate the increasingly regionally driven privatisation process, the EBRD is strengthening its attempts to provide wholesale instruments with a regional focus. The proposed CPF would address the growing demand for regionally intermediated equity finance. Moreover, the project will promote the 'indigenous' venture capital and asset management industry in Poland by building on the restructuring expertise developed at PBG and LMG. Central Poland Fund (CPF): a private equity fund, which will make equity and equity-related investments in the securities of private or privatising Polish small and medium-sized companies, principally in the fund's target region of Central Poland, particularly the seven vojvods of Lodz, Piotrkow, Plock, Radom, Sieradz, Skierniewice and Wlocwawk. The fund will be managed by the Lodz Management Group (LMG), a subsidiary of Powszechny Bank Gospodarczy S.A. (PBG), and will be the first fund supported by the EBRD which focuses on a region in Poland, and which is managed by a local Polish fund manager. Credit Suisse Asset Management (CSAM) will provide sub-advisory services to the fund. Poland Emerging Growth Fund (PEGF): an equity fund which will invest principally in pre-publicly offered equity of private or privatising Polish companies. PEGF will be managed by CSAM and will also invest in sub-funds which focus their investment on regions within Poland, including CPF. The two projects are related because CSAM will advise CPF in addition to managing PEGF. PEGF will also invest in regional funds and is expected to invest in CPF. With regard to PEGF, the EBRD will subscribe to between 10 and 15 per cent of PEGF's capital and voting rights. With regard to CPF, the Bank will subscribe to between 20 and 25 per cent of CPF's capital and voting rights. The aggregate subscription price for both PEGF and CPF will not be in excess of US$ 10 million (ECU 8.9 million) each. CPF: US$ 20 million - US$ 50 million PEGF: US$ 50 million - US$ 100 million The project was classified as "FI". Both funds will implement the EBRD's Environmental Guidelines for Investment Funds and Environmental Exclusion lists. Both funds will provide annual environmental reports to the Bank. None