In July 2000, as SEAF’s first generation of funds in Central and Eastern Europe were completing their investments, SEAF established its SEAF Central and Eastern Europe Growth Fund (The Growth Fund). The new fund’s purpose was to provide follow-on investments to those promising companies in SEAF’s initial funds that required additional growth capital to expand. The Growth Fund was the first fund in which SEAF was able to attract private capital, building relationships along the way with some of the firm’s most reliable investors.
The Growth Fund provided follow-on investments to an array of SEAF portfolio companies in the region. Overall, the fund made nine investments. The Growth Fund helped SEAF’s Polish ERP software portfolio company, originally a recipient of risk capital from CARESBAC Polska, to become the leading ERP company in the country, having developed a unique product suite that has attracted international attention. The Growth Fund also helped to develop SEAF’s Romanian supermarket chain, Croatian pharmaceutical company and Estonian clinical research organization. In doing so, the Growth Fund demonstrates the capacity for SMEs to grow rapidly beyond the narrow three- to five-year holding period that is standard for most conventional private equity funds. Through the Growth Fund, SEAF has also demonstrated that it is possible to manage a regional fund that leverages local CEE presence and provides a credible platform for spreading the lessons learned from one country to the next, while linking its investment staff and entrepreneurs across borders.