Author: SITA
Source: October 2nd 2008
The investment group makes its self-governing Qualified Investors Fund available to interested persons; finances will be directed to private equity investments mainly within the area of Central and Eastern Europe.
BRATISLAVA, October 2nd (SITA) – The investment group Arca Capital has established the first self-governing qualified investors fund in the Czech Republic, from which finances will be directed to private equity investments. A fund shareholder may become a qualified investor not solely from the Czech Republic, but also from other countries including the Slovak Republic, so long as he/she invests more than CZK 5 million. Apart from the standard institutional investors such as banks, insurance companies and dealers in stocks and bonds, individual investors may also be among this group of investors; they must, however, be supported by a written declaration stating their experience or knowledge of the field in which the fund intends to invest. Arca Capital CEE, closed-end investment fund, a. s. was granted a licence for the establishment of the fund by the Czech National Bank, which also oversees its operations. According to the company, the assets of the fund will mainly be directed to private equity investments within the area of Central and Eastern Europe. “Part of the fund may be invested in real estates in the region. In the first stage, the fund will invest in some existing projects of the Arca Capital group, for example Kasa.cz, Maria Balírny, Natura and others,” the company stated. With regard to spreading the risk, the fund may not invest all of its assets in one company or real estate; it must spread the funds in at least three projects.
According to the company, the reason for establishing the fund in the Czech Republic is that Slovak legislation does not currently permit the creation of a qualified investors fund which could direct its funds into private equity investments. “While the qualified investors funds established to date usually entrust management of the portfolio to an investment company, Arca Capital CEE will operate as a self-governing investment fund,” said Pavol Krupa, founder and majority shareholder of Arca Capital. The amount of capital raised in the fund is CZK 50 million and the fund is established for a period of ten years. New investors will be afforded an opportunity to join the Fund within the next eighteen months. According to Krupa, the fund aims to have the investors’ resources appreciate at the level usual for private equity investments in the region of Central and Eastern Europe, while the prospective appreciation of the Czech koruna against the euro could also bring additional revenues. The fund assumes that profits will be reinvested and dividends will be paid to shareholders.
Qualified investors funds have been in existence in the Czech Republic since 2006. Within the scope of the portfolio, they offer opportunities to invest in real estate, stocks and bonds or in private equity projects. The advantage of investing in these funds is a lower tax rate, which currently stands at 5 %. The fund, according to the law, may have a maximum of 100 investors and each investor’s investment is a minimum of CZK 1 million; this may, however, be increased to a higher level in the status of a particular fund.
Arca Capital is a private equity and real estate group of the holding type, which is active in the Slovak Republic, the Czech Republic, Ukraine and the United Kingdom. The group plans to invest in future new projects in the field of private equity and real estate both in the Slovak Republic and in the Czech Republic, but mainly in Ukraine, where it has expanded its presence in recent years. The group invests, for example, in businesses in the food processing sector, civil engineering, telecommunications, information technology and so on. In the Slovak Republic, the group is currently focused on development projects. Arca Capital currently manages assets with a total value of around EUR 125 million (SKK 3.766 billion). In December last year it issued corporate bonds to the value of SKK 500 million (EUR 16.6 million), thus enabling potential individual investors to take part in the financing of its projects.
