The FINANCIAL — The EBRD is investing up to $10 million in to Aureos Central Asia Fund to support medium-sized enterprises in the region through equity or quasi-equity investments.
The Aureos fund was set up in 2007 and had its first closing in November 2007 with total commitments worth $50 million, which were subsequently raised to $60 million. The fund’s target size at the final closing is $100 million.
The fund will make investments in the range of $2 to $10 million per company. The fund’s capital will mainly be invested in Kazakhstan where there is strong potential for the private equity sector to develop and also have the capacity to invest in other countries in Central Asia and the Caucasus.
The current global financial crisis makes the move especially timely and will contribute to supporting the country’s economy at a time when access to finance has become much more difficult.
Lindsay Forbes, EBRD Director Equity, said the EBRD’s participation in the fund is a “vote of confidence in the fund and its team, but also in the private sector of Kazakhstan and the wider region. The EBRD’s participation is expected to strengthen the fund and increase its attractiveness for other investors. Through the fund’s investments, benefits are expected for the real economies of the countries where Aureos is active.”
Talgat Kukenov, Aureos managing partner, added “the demand for private equity among companies is now stronger than ever. The Kazakh banking system in particular has been affected by the limited liquidity in capital markets worldwide. When credit is short, small and medium sized enterprises are often disproportionately affected. Private equity can very profitably fill that gap. Aureos is very pleased to team up partner with the EBRD, one of the most prominent investors in the region, and to join forces in creating a flourishing private sector in Central Asia”.
With a total project value of more than $5 billion, the EBRD is the largest single investor in Kazakhstan outside the oil and gas sector. The Bank is investing across all sectors of the economy and particularly focusing its efforts on the financial sector.