SGAM eyes leveraged mid-market buyouts in CEE

Alternative asset manager SGAM Alternative Investments has recruited Vinarom Vilaihongs and Piotr Misztal as partners in its emerging markets team.

Eastern Europe: Available leverage

They join the seven-strong Central and Eastern European team which is investing the firm’s €156 million ($232 million) Eastern Europe fund following its final close in early 2007.

They will both become members of the investment committee for the fund. Vilaihongs joins from European mid-market firm Cobalt Capital and has nine years of buyout experience.

Misztal joins from Riverside Europe Partners where he was a founding partner of the Warsaw office. He will take on a mandate covering Poland and the Eastern European region generally.

Bill Watson, chief investment officer for Eastern European private equity at SGAM, said the recruits deepened the team’s regional expertise and broadened its skill base because of Vilaihongs’ pure buyout experience.

“While buyouts have been going on for many years we now have the full tools and techniques to do leveraged buyouts.” There is now a more active use of leverage in the region, he said.

Despite problems in the worldwide credit markets, Watson said a number of banks were committed to Eastern Europe because of its strong growth. This meant leverage would continue to be available in the coming years. “Fundamentally, Central Europe has the economic fundamentals to push forward.”

The firm will soon make the first investments from its fund, he said.

More private equity firms continue to target the Eastern European region. Earlier this week, European mid-market buyout firm Bridgepoint made its first standalone acquisition in the region through the buyout of European rail logistics and operating company CTL Logistics for an undisclosed sum.
Last month, Mid Europa Partners closed the first €1 billion fund in the region with a €1.53 billion final close for its third fund, which was 40 percent oversubscribed.

“Some investors have got their feet wet in the region with Mid Europa and they’ve seen the big end of [the market in] Central Europe but there is much more beneath it. While Mid Europa is the natural entry point for a lot of people, I would look to convert them [to the region’s mid-market],” Watson said.