Aureos makes first Kazakhstan deal(2)

Emerging markets-focused private equity firm Aureos Capital has invested $10 million (€7 million) in Kazakhstani equipment leasing company Leasing Group, marking the firm’s first investment in the Central Asian nation.

The investment provides Aureos with a controlling stake in Leasing Group, which provides financial leases for equipment such as transportation vehicles, construction and mining equipment and specialised manufacturing equipment.

Founded in 2005, Leasing Group primarily focuses on small and medium-sized enterprises that find it difficult to obtain loans or leasing contracts for equipment often involved in energy or mining activities. The company has enjoyed a boom in demand due to a recent slide in the Kazakhstani credit markets and the continuing growth of the country’s energy sector.

Aureos launched the Central Asia Fund in the spring of last year, announcing that it was seeking a final close of roughly $100 million. The firm held a first closing of $50 million  later that year, $10 million of which originated from Kazakhstan government-backed fund of funds firm Kazyna Capital Management.

 Aureos has raised $60 million for the fund so far, with another $10 million in commitments received but not yet finalized, according to source familiar with the fund.

The Aureos fund looks to commit 70 percent of its capital to Kazakhstan, with the remainder devoted to opportunities in Azerbaijan, the Kyrgyz Republic, Georgia, Tajikistan, Turkmenistan and Uzbekistan.

The Kazakhstani government, which has been criticised for suppressing political dissent and allegedly rigging elections, has been actively soliciting private equity involvement in the country as traditional financing sources such as commercial banks continue to suffer from credit market woes.

Firms such as Baring Vostok, Kazimir Partners and Da Vinci Capital Management have all been targeting the country.