Regional Advent IV (Central and Eastern Europe)

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Project Description This PSD relates to a historical Bank project approved some years ago, and does not represent a new approval, or allocation of new funds.  Disclosure of this PSD was deferred in accordance with the transparency framework in place at the time, but due to an administrative oversight, was not subsequently disclosed In November 2007, the EBRD approved a commitment of up to EUR 100 million for the formation of a managed fund dedicated to making equity and equity-related investments in companies in Central and South Eastern Europe and Ukraine - areas underserved by private equity - with the objective of achieving long term capital growth.  The project was expected to have a positive impact on the investee companies of the Fund through Advent’s hands-on and control-oriented investment strategy and considerable technical expertise and facilitate transfer of financial and operational knowledge. Project Objectives The project aimed to support the raising of a regional fund, which would in turn contribute to the development of a varied and market regulated private equity landscape in the region.  Successful implementation of the fund was anticipated to attract institutional investment, develop and motivate high quality staff, and permit portfolio companies to grow, restructure, and increase in value. Transition Impact Investing in the fund was expected to leverage Advent’s extensive track record, developed over more than 13 years of investing in the region at the time, in order to demonstrate the success potential of private equity investments in Ukraine and Central and South Eastern Europe, transfer substantial experience in restructuring companies into the region, and thereby contribute to the development of a varied and market regulated private equity landscape. Additionality EBRD participation in the transaction as an investor was additional in a number of respects – it provided high quality risk capital to growing companies in the region, supported the eastward expansion of a successful and experienced fund manager, facilitated the mobilisation of private investment and promoted best practices in terms of environment, governance and integrity while preserving investor-friendly investment terms. Environmental and Social Summary This project was classified as Environmental Category FI, and the fund was therefore required to implement environmental procedures based on EBRD’s Environmental Procedures for Private Equity Funds, including adherence to the Environmental Exclusion List in effect at the time, and to provide an annual environmental report to the Bank for its approval.  In turn, investee companies were required to comply with – at a minimum – applicable national requirements for environment, health and safety local environmental standards. Technical Cooperation n/a - none Implementation Summary The Fund was able to mobilise substantial capital commitments from established international institutional investors for investment into Central and South Eastern Europe and Ukraine.