Aureos Capital, a manager of regional private equity funds specialising in investing in small to mid-cap businesses in Asia, Africa and Latin America has announced that commitments to the Aureos Central Asia Fund have increased to USD67m at its second closing.

The fund, which has two new investors, the Development Bank of Japan and the European Bank for Reconstruction and Development, seeks to make investments of between USD2m and USD10m in Azerbaijan, Kazakhstan, Kyrgyzstan, Georgia, Tajikistan, Turkmenistan and Uzbekistan.

The Aureos Central Asia Fund has already made a USD10m investment in Leasing Group, a company that provides financial leases for various types of equipment to small and medium-sized businesses in Kazakhstan, and of USD5m investment in Ala TV, a Kyrgyz cable TV operator.

'We are delighted with the performance of the Central Asia Fund at this early stage,' says Sev Vettivetpillai (photo), chief executive of UK-based Aureos Advisers, which provides advisory services to Aureos Capital. 'We have on-the-ground presence and are able to identify the best investment opportunities as they come up.

'There is a full pipeline of deals for the next 18 months. Despite current market circumstances, medium-sized businesses are still seeing good opportunities for regional expansion, providing fertile ground for our Central Asia Fund to invest.'

Talgat Kukenov, a managing partner of Aureos based in Almaty, Kazakhstan, says: 'The demand for private equity amongst potential investee 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, banks often cut down disproportionately on lending to small and medium-sized enterprises. Private equity can very profitably fill that void.'

Tamerlan Hamidzada, a partner with Aureos in Kazakhstan who has substantial private equity experience in his native Azerbaijan, adds: 'The expansion of the middle class in many central Asian economies has created new opportunities in the domestic markets. There is a boom in SME growth, which private equity, when executed well, can help support.'

Domiciled in Mauritius, Aureos Capital was formed in July 2001 to assume management of a range of funds originally sponsored by CDC Group, a UK government development finance agency, and to raise and manage a new generation of private equity funds. Its shareholders are group employees along with CDC as well as Norfund and FMO, respectively the Norwegian and Dutch development finance institutions.

Since 2001, Aureos has established 16 regional private equity funds and boosted assets under management to more than USD1bn and extended its geographical footprint to more than 50 emerging markets in Asia, Africa and Latin America. Its investors include financial institutions, bilateral and multilateral development finance institutions, funds of funds, foundations, family offices and high net worth individuals.

       

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