OPIC Board Approves $75 Million For First Mezzanine Investment Fund
June 20, 2012
(OPIC)
SMEs in Central and Eastern Europe to benefit; target capitalization of €250
million
WASHINGTON, D.C. – The Board of Directors of the Overseas Private Investment
Corporation (OPIC), the U.S. Government’s development finance institution,
approved $75 million in financing for the first investment fund focused on
making mezzanine debt investments ever to be supported by the agency. The fund
will invest in small and medium-sized enterprises (SMEs) in Central and Eastern
Europe (CEE), where the global financial crisis has severely restricted capital
critical for SMEs’ growth.
The Accession Mezzanine Capital III L.P. fund will invest in SMEs looking to
expand by providing mezzanine debt – subordinated financing which is senior only
to that of equity shares – primarily in Bulgaria, Czech Republic, Poland,
Romania and Ukraine. The fund has a target capitalization of approximately €250
million.
“The mezzanine capital provided by this fund will fill an enormous financing gap
in the CEE market, particularly for SMEs for whom financing is in many cases
simply unavailable,” said OPIC President and CEO Elizabeth Littlefield.
Since the start of the global financial crisis, the CEE mezzanine market has
undergone a sustained contraction. Whereas a number of banks, hedge funds and a
limited number of dedicated mezzanine funds were active in the market
pre-crisis, many have since exited and are not expected to return for the
foreseeable future.
“Equally important, Accession Mezzanine Capital III L.P. represents a major
milestone in the development of OPIC’s investment funds program. Making
mezzanine financing available to emerging markets where capital is scarce should
unlock exciting new growth opportunities for SMEs in developing countries the
world over,” Ms. Littlefield said.
OPIC selected as fund manager Mezzanine Capital Partners, a pioneer mezzanine
fund manager in the CEE market with one of the largest on-the-ground networks
among private equity firms in the region. Over the past 12 years, it has
successfully raised and invested two funds, and currently has offices in Vienna,
Warsaw, Budapest, Bucharest, Kiev and Prague.
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