Central Europe Fund of Funds (CEFoF)

The Central Europe Fund of Funds (CEFoF) is a EUR 97m fund-of-funds initiative created by the European Investment Fund (EIF) in close co-operation with the governments and national agencies of Austria, Czech Republic, Slovakia, Hungary and Slovenia (the CE countries) to boost equity investments into small and medium-sized enterprises (SMEs) and small mid-caps across the region, establishing a sound market-based risk financing infrastructure, implementing the best market standards for equity investments in businesses and attracting institutional investors and investment managers to Central Europe.

The CEFoF was launched in December 2017 and later expanded in April 2018, with EUR 12m from OeEB (administering investment for the Austrian Ministry of Finance), EUR 10m from SZRB AM, EUR 10m from MFB, EUR 8.2m from ČMZRB, EUR 8m from SEF and EUR 10m from IIB. The remaining EUR 38.8m was contributed by EIF. To deploy the funds-of-funds, EIF utilises its experience and expertise in managing similar initiatives in close collaboration with national and regional partners across Europe.

What is the CEFoF’s investment strategy?

The CEFoF intends to build a balanced portfolio of venture capital and private equity funds performing later stage and growth equity investments (including acquisition, buy-and-build and replacement capital strategies that include capital increase in the portfolio companies) with a focus on the CE countries, over an investment period of four years until the end of 2021. The balance will cover the aspects of investment focus, vintage year and an appropriately diversified number of underlying transactions.

EIF, as manager of the CEFoF, considers the following investment opportunities:

• Investments into VC, PE and mezzanine funds with proven experience and insight into the Central European market, focused on later stage and growth investments.
• Co-investments through co-investment vehicles alongside investment funds, family offices and institutional investors into later stage and growth phase SMEs and small mid-caps. The CEFoF co-invests with selected investors, which are based or active in the CE countries.

Are you a fund manager interested in partnering with us under the CEFoF?

Both funds and direct co-investments need to satisfy a strict set of investment criteria applied under EIF’s normal investment process. In terms of direct co-investments, we look for a qualified and credible partner, with extensive experience in the specific deal and whose reputation is at stake when undertaking any single investment. You are eligible to apply to become an EIF financial intermediary under the CEFoF provided you fulfil, amongst others, the following criteria:

• Your investment strategy is focused on the CE countries. Proposals will outline how the fund fits in the current competitive landscape, what sector and stage is the fund targeting and why, how does it take into account the know-how of the team.

• Your team is well-balanced, with team members complementing each other in terms of skills and experience, with a proven ability to work together. The fund manager will be either located in a CE country or will have a team dedicated to the CE countries. Emerging and first time teams are also encouraged to apply.

• Your track record proves adequate experience in the targeted investment area. Previous investment successes and failures will be carefully analysed in order to understand the team’s capabilities.

• The fund is capable to attract further private capital from other investors, e.g. family offices, pension funds and other institutional investors, which at least matches the CEFoF’s participation.

• The fund size is commercially viable to ensure the team’s stability and the fund’s investment capacity.

• The legal and tax structure of the fund is clear and includes market standard terms and conditions.

• All stakeholders in the fund have their interests properly aligned.

Read more about the details to include in your investment proposal

How does the CEFoF investment process work?

Interested fund managers shall submit investment proposals to EIF, as manager of the CEFoF. Should the investment proposal meet the criteria listed above, your team will pass several screenings before the EIF undertakes to start a full due diligence process and brings the proposal further through EIF’s approval steps.

Contact

Michal Košina, tel.: +352 2485 81775, e-mail: m.kosina@eif.org