ARX Equity Partners has completed a first close of its latest Central Europe vehicle, ARX CEE IV, at EUR54 million, with total subscribed commitments of EUR66 million.
The fund, which has a target of EUR100 million including commitments from the European Investment Fund (EIF), will continue to execute the ARX value-creation strategy of investing in lower mid-cap businesses and SMEs in select Central European countries.
ARX has completed 22 platform investments and numerous add-on acquisitions over its two-decade operating history in the region. The EIF investment benefits from EU support under the COSME programme funded by the European Commission.
ARX anticipates that the majority of the fund will be invested in the Czech Republic. The Czech economy expanded by 4.3 per cent in 2015, propelled by strong exports, which grew by 7.2 per cent over 2014. Czech GDP growth levels are expected to remain strong in 2016 and 2017, primarily driven by the country's highly competitive export-oriented precision manufacturing industry.
The fund will complement its strong Czech presence with investments in certain additional Central European countries with attractive investment environments, such as Slovenia, where ARX recently generated a 4.1x cash-on-cash return from its Tomplast investment.
Brian Wardrop, ARX managing partner, says: "We look forward to capitalising on several uniquely distinctive features that are generating succession-driven deal flow momentum in our target market. We are also especially pleased that several well-respected local investors have chosen to endorse the ARX strategy and its differentiated geographic positioning and would like to thank all our investors for their support."
First close investors in the fund include institutions such as the European Investment Fund, Czech retail bank Ceska Sporitelna and RSJ Private Equity, in addition to several family offices.
