The International Finance Corporation (IFC), the European Bank for Reconstruction and Development (EBRD), and CRG Capital, a financial service firm, launched the Central and Eastern Europe (CEE) Special Situations Fund. A recent press release from the EBRD claims that the CEE Special Situations Fund, as part of the IFC’s Debt and Asset Recovery Program, is the first fund to focus on the “acquisition, turnaround, and resolution of corporate distressed assets [of underperforming businesses] in Central and Eastern Europe.” While the EBRD, IFC, and CRG Capital have provided an initial €36 million, the fund aims to raise €200 million. Lars Thunell, Executive Vice President and CEO of IFC believes that the fund will help “restore long term viability of the regional financial system,” and will make financial services more affordable and available for small and medium private businesses.
About the EBRD:
The European Bank for Reconstruction and Development (EBRD) is, according to its website, “the first international financial institution of the post Cold War period.” Headquartered in London, the bank began operations in 1991 upon the agreement of 40 countries and is now “owned by 61 countries and two intergovernmental institutions.” It aims to “finance operations that are both commercially viable and assist development” in 29 countries in Central Europe and Central Asia. It does this by providing loans, debt securities, equity investments, guarantees, and technical assistance to micro and small businesses as well as commercial banks and non-bank microfinance institutions (MFIs).
About IFC:
The International Finance Corporation, a member of the World Bank Group, contains 182 member countries, and uses loan and debt securities, equity investments and guarantees as instruments of poverty alleviation. Specifically, its functions involve supporting the private sector development, mobilizing private capital, and providing advisory and risk mitigation services to businesses and services. In 2009, the IFC made new investments in developing countries that reached a total of USD 14.5 billion.
About CRG Capital?CRG Capital is a private equity firm that focuses on asset management for underperforming companies in Central and Eastern Europe. CRG Capital invests in direct control equity investments, non-performing debt instruments, stranded or end-of-life regional private equity funds, and other “distressed or special situation” companies. The firm, established in 1992, was initially known as “The Recovery Group.”
Bibliography:
[1] EBRD Press Release. http://www.ebrd.com/new/pressrel/2009/091202b.htm
[2] EBRD. https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=European+Bank+for+Reconstruction+and+Development+(EBRD)
[3] IFC. https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+(IFC)
[4] CRG Capital. https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=CRG+Capital
Original Source Article: Press Release from the EBRD
January 11, 2010
IFC, EBRD, and CRG Capital launch first restructuring fund for central, eastern Europe to support region’s recovery
IFC, a member of the World Bank Group; the European Bank for Reconstruction and Development; and CRG Capital, a leading restructuring fund manager have launched the first fund dedicated to investing in distressed assets in Central and Eastern Europe.
The CEE Special Situations Fund will invest in underperforming companies to support recovery in the region. It is being established by CRG Capital. The fund aims to raise €200 million, with EBRD, IFC, and CRG Capital initially committing a total of €36 million. It will focus on the acquisition, turnaround, and resolution of corporate distressed assets in Central and Eastern Europe.
The fund forms part of the Debt and Asset Recovery Program launched by IFC during the 2009 World Bank Group’s Annual Meetings in October.
Parham Pouladdej, Managing Director of CRG Capital, said, “We are very pleased with the fund’s first closing and the cornerstone investors’ confidence, support, and commitment. This successful closing reflects our track record, the strength of our team and investment strategy, as well as our unique positioning. While challenging, the current environment provides substantial opportunities to capitalize on throughout the region.”
Varel Freeman, EBRD First Vice President, said, “The EBRD’s participation in the fund will support the development of private equity investments in companies that have been adversely affected by the economic crisis. The fund will support an established management group that will bring new skills to support the recovery of viable, but struggling, companies.”
Lars Thunell, IFC Executive Vice President and CEO, said, “We are pleased to work with EBRD and CRG Capital on this important initiative for Central and Eastern Europe. By addressing the problem of bad debts, we are helping restore the long-term viability of the regional financial system so that individuals and small and medium businesses can gain better access to affordable finance.”
The Debt and Asset Recovery Program is a key element of IFC’s strategy to support the Europe and Central Asia region.
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