Genesis Capital Launches New CEE Fund

Genesis Capital Group has launched its largest fund to date. The newly formed Genesis Private Equity Fund IV (GPEF IV) wants to conclude up to three hundred million transactions a year.

At present, the GPEF IV fund has funds in the amount of 2.6 billion crowns. By the end of this year, however, the size of the fund is expected to increase by another half to the final 3.9 billion. The fund will invest in established Central European companies whose founders are considering suitable successors or seeking capital to support growth. The preferred area will be business services, light and medium production, IT services or, for example, specialized retail.

“Above all, it must be a company that has strong growth potential and at the same time demonstrates the ability to successfully identify and implement development projects. However, a competent and experienced management team is an extremely important and key building element for us, ”says Radan Hanzl, a partner at Genesis Capital Equity, about the preferred companies.

At the same time, the fund will look for opportunities to purchase both minority and majority shares. “We focus more on specific investment situations, typically, for example, succession solutions, and we then tailor the capital solution, including the amount of the share,” describes the fund’s strategy, Ondřej Vičar, head of Genesis Capital Equity. 

This is the ideal time to set up a similar fund at the moment, says Petr Dědeček, expert on mergers and acquisitions and executive director of Patria Corporate Finance. “There is a lot of money on the market that investors want to put into anything profitable. At the same time, generational change continues in Central Europe, which offers great opportunities for shopping. Last but not least, the uncertainty associated with a pandemic can also mean a lower price, “calculates Dědeček, according to whom, however, the uncertainty is always twofold. “In uncertain times, the market is changing dramatically rapidly, and even established companies can lose the positions they have been building for years,” he added.

A number of institutional investors have invested in the fund, including the European Investment Fund (EIF), Česká spořitelna and two insurance companies from the Vienna Insurance Group. The fund was originally scheduled to launch earlier this year. “GPEF IV fundraising has been the most robust and ambitious to date, and yet it was the fastest fundraising process in the entire history of Genesis Capital,” concludes Vičar. 

Genesis Capital is a group of funds that offer small and medium-sized enterprises in Central Europe assistance in financing their growth and development. Its portfolio includes, for example, a minority stake in the Datart electrical appliance network or a 100% stake in the largest operator of customer call centers in the Czech Republic, Conectart. The group was founded by Jan Tauber, the former head of the Czech banking branch of HSBC.