Genesis Capital launches its new private equity fund of €45M for SMEs
Genesis Capital, one of the largest providers of private equity in the Czech Republic and Slovakia, has launched a new fund – Genesis Private Equity Fund III (GPEF III), the fourth fund Genesis Capital will have managed in the 15 years since its establishment. As its predecessors, GPEF III will focus on investments into Czech and Slovak small and medium-sized enterprises with high growth potential. At launch time, the fund has EUR 45 million at its disposal, but its size may increase up to EUR 80 million. Investors include Česká spořitelna and the European Investment Fund, Genesis Capital’s two long-standing partners. They have been joined by Komerční banka’s Investment Company (IKS KB), through which private individuals can invest into Czech and Slovak enterprises alongside their institutional counterparts.
“We are pleased to be able to contribute through our private equity funds to the development of businesses in the Czech Republic and Slovakia. We believe that GPEF III will facilitate the growth of at least a dozen Czech and Slovak companies that will be interested in this type of equity financing,” commented the fund’s launch Jan Tauber, Managing Partner of Genesis Capital. “We want the new fund to replicate a good performance and above-average returns of our previous GPEF funds. For instance, our first GPEF fund, which was fully exited and wound up last year, more than doubled the value of investors’ initial investments during the 10 years of its existence.”
As a generalist private equity fund, GPEF III will invest into companies from all segments and sectors of economy, with the exception of real estate, armaments, gambling, adult entertainment, and tobacco and liquor production. As Genesis Capital’s previous funds, GPEF III will provide growth capital, financing for acquisitions, and funds for management buyouts.
At the time of the first closing, the GPEF III fund has EUR 45 million available from following investors: the European Investment Fund (EIF), Česká spořitelna, Investment Company of Komercni banka (IKS KB), eQ Private Equity of Finland, Kooperativa pojišťovna, and Česká podnikatelská pojišťovna. Since other potential investors have expressed interest in investing into the GPEF III fund, it is expected that the size of GPEF III may increase up to the maximum volume of EUR 80 million in the course of the next year.
Česká spořitelna, a key investor in GPEF III, has now entrusted its funds to Genesis Capital for a third time. “Česká spořitelna and its corporate division Erste Corporate Banking are long-time partners to 2 z 3 small- and medium-sized enterprises to which they provide funding for growth, acquisitions , and various other purposes. Our partnership with Genesis Capital, which has lasted since as early as 2003, when we began to invest into Czech and Slovak businesses through the GPEF funds, allows us to continually develop support for companies from the SME segment. We value Genesis Capital as a suitable partner from the point of view of good professional attitude of their team of investment managers, as well as above-average returns from our investments. These factors have persuaded us to continue the partnership within the framework of the new GPEF III fund,” comments František Havrda, CEO of Česká spořitelna’s Funding & Advisory Group.
On the contrary, IKS KB is a new prestigious investor into Genesis Capital funds which brings a new dimension to the investment process. „IKS KB joined forces with Genesis Capital to establish the KB Private Equity Fund through which KB clients (qualified investors) can through the GPEF III for the first time invest into Czech and Slovak medium-sized and small companies. As we observe and follow demand for investments of this type, we have decided to create conditions facilitating the participation of private individuals in the GPEF III fund,” explained Petr Slabý, Head of Private Banking at KB.
Genesis Capital’s other new partners for the GPEF III fund include Kooperativa pojišťovna and Česká podnikatelská pojišťovna, both of them members of the Vienna Insurance Group. “The investment into the Genesis Capital private equity fund marks our entry into a new class of assets as part of our ongoing effort to seek new opportunities to enhance the value of our investment portfolio. The private equity segment offers above-average long-term return in combination with a reasonable degree of risk,” said Petr Zapletal, a member of Kooperativa’s board of directors.
As regards its fourth fund, Genesis Capital will follow the same investment strategy that has been proven successful in the past. “We identify suitable investment opportunities using several basic criteria,” explains Tauber. “First and foremost, the company must have strong growth potential and must demonstrate the ability to successfully execute development projects. Another highly important factor is a competent and experienced management team. We inicite that company top executives invest alongside us into respective companies to share with us potential up-side as well as the risk of investment failure.“
About Genesis Capital s.r.o.
Genesis Capital offers financing to promote growth and development of small- and medium-sized enterprises in the Czech Republic and Slovakia. Through its private equity funds, Genesis Capital has supported more than 30 companies and has helped many of them become leaders in their respective fields. To date, Genesis Capital has raised over two billion Czech crowns for the development of Czech and Slovak companies.
Since 1999, Genesis Capital has managed four private equity funds with a cumulative size in excess of EUR 140 million. Two of these funds have finished their activities, distributing funds to investors. The third Genesis fund has now been fully invested, providing all raised capital to Czech and Slovak enterprises. Presently, Genesis Capital is preparing to launch its fourth fund, Genesis Private Equity Fund III, which will have an initial size of 45 million euros and will, once again, focus on investments into small- and medium-sized enterprises in the Czech Republic and in Slovakia. A certain part of its resources might be allocated to direct investments in Austria, Hungary, and Poland.
At present, Genesis Capital holds a share in Servodata, VYDIS, KS Klima-Service, AZ KLIMA, GTH catering, Roltechnik, Sieza, Swell, and 3070.
Source: Genesis Capital Press Release