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Fund Profile:
CARESBAC Polska
Main Offices: Ul. Polna 40, 00-635 Warsaw, Poland
Website: http://www.seaf.com/poland
Email: caresbac@it.com.pl
Fund Manager: Small Enterprise Assistance Funds (SEAF)
Key Personnel: Piotr Kalaman, Director General
Established: 1992
Total Committed Capital: US $7.9 million
Amount Invested: US $9.1 million (115%) (Fund permitted to reinvest earnings; thus, amount invested exceeds capital committed).
Shareholders:
Small Enterprise Assistance Funds (SEAF) via grant from the United States Agency for International Development (USAID)
The Polish Cooperation Fund
The Foundation for the Development of Polish Agriculture (FDPA)
European Bank for Reconstruction and Development (EBRD)
Geographic Focus: Poland
Background
CARESBAC-Polska was the first fund established by SEAF, and was set up as a developmental fund to invest in small and medium-sized enterprises (SMEs) in Poland. Through the help of SEAF's first Chairman, Orville Freeman, and the constructive approach taken by the Polish Agency for Cooperation, aided by a commitment by the Overseas Private Investment Corporation (OPIC), SEAF secured its first US $2.3 million for investment, immediately after Poland's historic change in its economic and political systems. Investments are made in combination with a management training and technical assistance component in order to enhance the business performance of the Fund's investments and to help meet its developmental objectives. The Fund actively assists its portfolio companies in implementing appropriate improvements in management techniques and practices, especially relating to financial control, cost accounting, quality control, and marketing. In addition, the Fund Manager's investment officers are actively engaged in implementing business strategy and in following-up with advice rendered by outside experts. Business support programs are sponsored not only by the Fund, but also by other international and local agencies.
Social Mission
By providing affordable financing to private sector SMEs in underserved markets, the Fund seeks to build the capacity of SMEs to expand production, access new technology, improve competitiveness, reach wider markets, increase profits, and achieve long-term commercial sustainability. By supplementing investments with technical assistance, SEAF aims to help develop business and management skills, improve corporate governance and transparency, and formalize legal structures, business structures, and tax reporting. The development of a vibrant and sustainable SME sector will help to generate new employment, export revenues, and government tax revenues; stimulate economic growth; promote free markets; improve social welfare; and contribute to political stability in developing countries. The Fund also seeks to provide examples of successful private enterprises to entrepreneurs and investors, help SMEs establish new customer and banking relationships with the formal banking sector, create a culture of equity investment, institutionalize investment methods and structures, and help to develop the country's overall financial sector.
Investment Information
The Fund invests in enterprises in Poland engaged in a broad diversity of sectors, with a special emphasis on companies that are export-oriented and those with strong growth prospects. The Fund seeks to invest a minimum of 50% of its investments into the agricultural sector, including businesses engaged in the production, processing, packaging, and distribution of agricultural products and the manufacturing and distribution of agricultural inputs. It targets its remaining investments in existing private companies operating in light industry for export, production of components for housing and construction of commercial buildings, provision of essential business services, and support services in the tourism sector. The Fund will not invest in enterprises engaged in the following activities: banking, insurance, and financial services; speculative investment activities such as real estate or commodities trading; production or sale of tobacco products or hard alcohol; arms manufacturing or other military-related activities; operation of casinos or other gambling-related activities; operation of abortion clinics; or activities harmful to the environment. The Fund has invested in small- and medium-sized enterprises with annual revenues between US $150,000 and US $1 million, employment between 15 and 100 people, and current owner's equity between US $25,000 and US $250,000. Investments range from US $50,000 to US $250,000. The Fund has no stage preferences. For selected portfolio companies, the fund invests jointly with the North Fund.
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