Polish private equity/venture capital market in 2007 

EXECUTIVE SUMMARY
According to the 2007 survey carried out by the European Private Equity and Venture Capital Association (EVCA), fundraising for CEE reached a new record level in 2007. PE/VC funds raised EUR 4.25 billion of new capital, which represents an increase of EUR 2 billion over last year's level (EUR 2.25 billion).
Private equity and venture capital (PE/VC) investments in Poland reached a total of EUR 684 million in 2007, which is more than double the 2006 level of EUR 303 million. Most of the investments were made into mature companies.
In 2007 fund managers generated exits from 33 Polish companies with a historical cost of EUR 175 million

FUNDRAISING
As the vast majority of private equity funds raised for CEE were for the region as a whole and not for any specific country, fundraising is presented as a total pool of capital raised for the region. Fundraising for CEE reached a new record level in 2007. PE/VC funds raised EUR 4.25 billion of new capital, which represents an increase of EUR 2 billion over last year's level (EUR 2.25 billion).

In 2007 r. several PE/VC players announced the closing of new funds, among others: Mid Europa Partners (EUR 1.5 billion, the largest fund ever raised for the region), AIG Capital Partners (EUR 520 billion), Global Finance (EUR 350 million), Riverside (EUR 315 million), Argus Capital Partners (EUR 263 million), Southeast European Fund SigmaBleyzer (EUR 250 million), Mezzanine (EUR 100 million) and Krokus PE (EUR 100 million).

INVESTMENT ACTIVITY

Investments in Poland reached a total of EUR 684 million in 2007, which is more than double the 2006 level of EUR 303 million. Most of the investments were made into mature companies. Buyout and replacement capital transactions accounted for 80% or EUR 547 million of total investment volume. The other 20% went into venture investments, including early stage financing: seed, start-up and expansion. Only EUR 4.3 million of total venture investments went to companies at very early stages (seed and start-up).

In 2007 business & industrial products as well as financial services were the most attractive sectors. Fund managers invested respectively EUR 138 million and EUR 133 million of their total investment into these sectors. Transportation ranked second, receiving EUR 112 million or 16% of the total.

In million EUR	Amount invested	%	Number of companies	%
Chemicals and materials	0,9	0,1	1	1,5
Life sciences	102,8	15	5	7,7
Computer & consumer electronics	26,3	3,8	5	7,7
Communications	11,8	1,7	17	26,2
Consumer goods and retail	74,7	10,9	6	9,2
Consumer services: other	6,3	0,9	4	6,2
Bus. & industrial prod.	138,2	20,2	11	16,9
Bus. & industrial services	2,6	0,4	1	1,5
Transportation	111,7	16,3	2	3,1
Construction	12,8	1,9	3	4,6
Energy and environment	62,0	9,1	2	3,1
Financial services	133,5	19,5	8	12,3
Total investment	683,6	100	65	100

DIVESTMENT ACTIVITY
Divestment activity or 'exits' are reported in the EVCA survey at the historical cost of the investment rather than as the actual proceeds from the sale of the companies. According to the survey, in 2007 fund managers generated exits from 33 Polish companies with a historical cost of EUR 175 million. This represents 27% growth on 2006 exit amounts (EUR 138 million)
Sale to another private equity house represented the most common form of exit in 2007 and accounted for 55% of all exits. The other main exit routes were trade sale - 13% of total exits, and repayment of principal loans - 13% of the total. Divestments by public offering accounted for just 3.4% of the total value of divestments in 2007 (down from 55% in 2006), which comes as no surprise considering the adverse stock market conditions in the second half of 2007. No write-offs were recorded in 2007.