ANNUAL REPORT 2007 | 2008 - Gimv

BUY-OUTS
AND GROWTH
CAPITAL
INVESTMENTS IN CENTRAL AND
EASTERN EUROPE
Gimv has been active in the Russian market since 1996, where,
via the management company Eagle Venture Partners, it has invested
USD 104 million in 31 shareholdings. With an investment
in the BASK outdoor chain and an investment commitment for
soy producer PTI, the Eagle Russia Fund launched in 2006 is
now nearly fully invested, with USD 27 million in four shareholdings.
At the start of 2008, Gimv concluded a partnership with
KBC Private Equity for private equity investments in Russia.
The Russian market has seen average growth of over six percent
a year since 2000. Within a few years Russia has grown into
the world’s tenth largest economy. Russian consumers measure
themselves against Western living standards, are very confi dent
in the market and have high spending patterns. This offers interesting
investment possibilities in the fast-growing consumer
and services sectors.
In 2006, USD 1.5 billion of new funds were collected, bringing
the total capitalization of the private equity industry in Russia to
USD 6 billion. Is it generally assumed that the strong growth in
this sector continued last year. All investment stages, from early
stage to buy-out, are represented here. Russia is becoming increasingly
a fully-fl edged venture capital market. This growth
will very likely continue and competition between venture capital
suppliers will increase. For the time being, however, valuations
remain very attractive.
Investment focus
Gimv and KBC Private Equity will be investing in medium-sized
mature companies in Russia via their joint venture Eagle Capital
Partners. Investee companies preferably operate in fast-growing
sectors like food and drink, leisure, personal care, telecommunications,
pharmacy and building construction. Initially the accent
will be on taking minority interests.
In the 2007-2008 fi nancial year the existing Eagle Russia Fund
made a new investment in BASK. Shortly after the closing of
the fi nancial year followed the investment in PTI. These two
investments, together representing USD 14 million, bring the
total invested amount to USD 27 million, and making the fund
almost fully invested.
26 | Gimv Annual Report 2007-2008 | Operating and fi nancial report
BASK
www.bask.info
BASK Group is the Russian market leader in outdoor clothing
and equipment. The group produces and sells clothing and accessories
under two proprietary brands, BASK and LMA, as
well as distributing internationally well-known brands. BASK
has its own chain of fi ve stores in Moscow and one in Nizhni
Novgorod and is looking to expand to other cities. The Eagle
Russia fund entered BASK in October 2007 with a shareholding
of 43 percent.
PTI
PTI is a leading Russian producer of soy products, herbs
and spices. These products are intended for food processing
companies in Russia and countries like Azerbaijan, Georgia,
Ukraine and Belarus. The company has twenty distribution
centres across these countries. PTI sells both its own brands
and imported products. The company’s 2000 customers are
mainly patisseries and companies in the meat, dairy and soft
drink industries. At the start of 2008 Eagle Russia Fund invested
in PTI along with Troika Capital Partners, the private equity fund
of Troika Dialog, one of Russia’s largest merchant banks. 21 percent
is now owned by the Eagle Russia Fund.