OPIC contributes $65m to new Advent fund

The Overseas Private Investment Corporation (OPIC), the US governmental agency that provides support for American investment abroad, will contribute $65 million to a fund being raised by the US-based company Advent for Central and Eastern Europe, Romania included.

OPIC's announcement comes one week after the European Bank for Reconstruction and Development announced its proposed contribution of 50 million euros to the same fund, to be endorsed on May 25.

Other private financial institutions, European and American, are expected to contribute to the fund together with OPIC and EBRD.

Advent is one of the most active investment management companies in Romania, as it is the majority shareholder in drug manufacturer Terapia Cluj, as well as in Euromedia, a leading outdoor advertising company. It is also the most significant minority shareholder in mobile telephony operator MobiFon (Connex).

"OPIC's participation in this fund represents the latest in many ongoing efforts by the Bush Administration and OPIC to stimulate investment and trade in Central and Eastern Europe," explained Peter Watson, OPIC President and CEO. "OPIC also recognises the valuable support that countries in the region provided the United States in the international war against terrorism."

The new Advent fund for the region that includes Romania will be called Advent Central & Eastern Europe III. It will apply a typical private equity strategy, based around finding companies with growth potential, providing financial support to them for three to five years, and then selling them to a strategic investor.

The fund will also be involved in restructuring and privatisation in the area.

Advent's current fund for investing in the region is known as Advent Central and Eastern Europe II. The countries receiving most of the fund's money over the last few years have been Poland, Hungary, the Czech Republic and Romania.

Advent's most recent major transaction in Romania was the acquisition of a stake of more than 90% in Romania's second leading drug producer, Terapia Cluj, for about $45 million.
laurentiu.ispir@zf.ro