Region Snapshot

CEE/CISAn Overview of Trends in Select Sectors and Markets July 2008 overage of the Central and Eastern Europe (CEE) and Commonwealth of Indepen- Region Snapshot dent States (CIS) markets often mistakenly conveys homogeneity—a monolithic Central and Eastern Europe (CEE) C“emerging Europe.” This brief covers a range of markets under the rubric of CEE includes: and CIS, however with the acknowledgement that these “regions” remain fragmented, Latvia with a core of large, more mature markets coupled with several smaller developing PE Lithuania markets. Estonia Czech Republic Among the CEE markets, more nuanced treatment in the wake of the first wave of Acces- Hungary sion reflects the reality that “CEE” subsumes several discrete investment environments. Poland Slovakia Poland—with 40% of GDP and population among the Accession countries—has captured Romania the majority of private equity investment to date. However, private equity investors are Bulgaria increasingly finding opportunities in markets throughout the region, with the Baltic coun- Albania Slovenia tries and Southeastern Europe emerging as the next frontiers. Croatia The inclusion of Russia among the BRICs obscures the distincitviness of the Russian pri- Bosnia and Herzegovina Serbia vate equity market, over a decade in the making. While Russia continues to draw the bulk Montenegro of investment within the CIS markets, remarkable economic growth in the markets of Republic of Macedonia Ukraine and Kazakhstan is encouraging investors to broaden their scope within the CIS. Turkey

Perceptions about investment risk in CEE and CIS markets have improved. But the no- The Commonwwealth of Independent States (CIS) includes: tion that Accession in the CEE markets translates to uniform harmonization with EU stan- dards is misplaced. Enforcement of legal protections and treatment of investors still var- Armenia Azerbaijan ies from country by country. Furthermore, while robust natural resource-driven economic Belarus growth has given birth to an emerging consumer culture in the CIS countries, these mar- Georgia kets remain relatively uncrowded due to remaining challenges in sourcing and managing Kazakhstan Kyrgyzstan continued on page 2 Moldova EU Accession and Eurozone Enlargement Timeline Russia Country EU Accession Euro Adoption Date Tajikistan Turkmenistan Czech Republic 2004 2012—14 Ukraine Estonia 2004 2011 Uzbekistan Hungary 2004 2014 (Markets in bold indicate core markets attracting the Latvia 2004 2012—13 majority of private equity investment to date) Lithuania 2004 2011 Poland 2004 2012—13 Slovakia 2004 2009 Bulgaria 2007 2012 Romania 2007 2014 Slovenia 2004 2007 Turkey 2013* - Macedonia cand. - Croatia cand. -

investments. The good news is that fund managers operating Fund managers are also increasingly targeting investments locally across the CEE and CIS countries see these markets as across Southeastern Europe. In 2007, Bedminster Capital Man- underinvested, and the higher risks relative to Western Europe agement closed its US$200 million Southeastern Europe Equity are still offset by the possibility of higher returns. Fund II, and Marfin Investment Group closed a US$7 billion fund that will invest in the Balkans and Turkey. Fundraising Trends As the sophistication of CEE private equity markets grows, es- tablished local players are being joined by US and Western Eu- Capital commitments for private equity in CEE and CIS steadily ropean fund managers. Several GPs have set up operations in increased from US$2.2 billion in 2003 to an outlier US$14.6 Warsaw and are developing local teams, among them UK-based billion raised in 2007. The unusually high figure in 2007 can be Bridgepoint and 3i and US firms The Carlyle Group and CVC attributed to Marfin Investment Group’s US$7 billion close and a Capital Partners. US$2.1 billion close by MidEuropa Partners. Following multiple Fundraising for Russia and CIS record-breaking fund closes in 2007, fundraising is down in the first half of 2008. Funds focused on CEE and CIS markets raised Russia experienced a breakout year in 2007, when capital com- US$2.5 billion through June 2008, versus US$3.6 billion raised mitments grew to a record high of US$ 1.8 billion, led by Baring in the same period in the previous year. However, the region Vostok’s US$1.45 billion Baring Vostok Private Equity Fund IV. has attracted a host of new fund managers seeking capital —29 The Russian private equity market has long been both very local funds are seeking to raise as much as US$10.2 billion for invest- and relatively uncrowded, but that is gradually changing. ments across CEE and CIS as of July 2008. Western European and US-based firms are beginning to enter Fundraising for CEE the Russian landscape. In May 2008, Nordic-based asset management firm CapMan signed an agreement to acquire private Veteran fund managers with regional mandates have amassed equity firm NORUM along with its 13 private equity professionals. ballooning pools of capital: Mid Europa closed US$2.1 billion At the time of the acquisition, the firm was raising NORUM Rus- Mid Europa III in 2007, and Advent International closed US$1.6 sia Fund III with a target of €150 million. The fund has raised billion Advent Central & Eastern Europe Fund IV in April 2008. €88 million and will now operate under the name CapMan Rus- While regional CEE funds have expanded in size and investor sia Fund. TPG, which recently bid on two headline-grabbing base, country-dedicated and subregional funds are also grow- transactions in Russia, set up operations in Moscow in 2007. ing, most notably in Turkey. Turkey’s private equity industry is Mint Capital, a Scandinavian private equity firm operating in undergoing a renaissance, with funds raising US$1.1 billion in Moscow with US$150 million under management, has closed 2007 after several years of relative inactivity. New Turkey-dedi- two funds investing primarily in companies located around the cated funds include Actera Partners Fund I with US$475 million city and intends to raise a larger successor fund later this year. and Turkven’s Turkish Private Equity Fund II with US$428 million Belgium-based GIMV, which launched the US$100 million Eagle in committments. continued on page 3

EMPEA Insight Advertising Opportunities

Editorial Director Jen Choi EMPEA Insight, available free of charge to members, offers [email protected] readers an overview of the data and drivers behind investment Writing and Research Harrison Moskowitz / Sean Michaels trends in emerging markets private equity. Each issue of EMPEA [email protected] / [email protected] Insight provides an opportunity for a single exclusive back page Production Manager Cristiane Nascimento advertisement. Issue-specific placements are on a first come, first [email protected] served basis. Upcoming issues include: the Middle East, India, About EMPEA Latin America, Southeast Asia, Africa and Real Estate. For more The Emerging Markets Private Equity Association is a broad-based information about advertising opportunities and rates, please membership organization founded in 2004 that focus on the emerg- contact Cristiane Nascimento at [email protected]. ing private equity markets of Africa, Asia, CEE, Russia/CIS, Latin America, and the Middle East.

Russia Fund in 2006, signed a partnership agreement with KBC EMPEA Survey of LP Interest: Current vs. Projected Private Equity this year to create a new company, Eagle Capital Investment Strategy, CEE/Russia and CIS Partners, which will invest EUR10 million per year in medium- sized Russian companies. 100% 87% Domestic private equity shops accustomed to competition from 80% 75%

oligarch-run industrial groups are also being joined by a plethora vesting 61% Current Strategy 60% 57% of local investors flush with cash-generating business looking to Projected invest in smaller private equity-style deals. 40% Strategy (3-5 years) 20% Within the CIS, Russia continues to hold the core, but the scope In espondents % R of funds is expanding to Ukraine and Kazakhstan, the largest 0% 2007 Survey 2008 Survey and fastest growing among CIS markets. Russian fund managers such as Baring Vostok and Alfa Capital Partners are consid- Source: EMPEA ering investments outside of the Russian Federation. The European Bank for Reconstruction and Development Fund managers Aureos Capital and Mint Capital Advisers have (EBRD), which has played a catalytic role throughout private eq- recently launched funds focused exclusively on investments in uity’s development in Emerging Europe, remains the leading LP CIS countries—Mint Capital III was launched this year with a tar- for funds dedicated to CIS countries. But government-backed get of US$250 million, and Aureos Central Asia Fund held a first funds are emerging as another source of capital. State funds close of US$50 million in 2007. Ukraine’s private equity market, are channeling natural resource-driven wealth into investments while still small, continues to grow. Ukraine-based Horizon Capi- intended to diversify economic growth beyond oil and gas. Ka- tal is raising a US$300 million Emerging Europe Growth Fund zyna Sustainable Development Fund teamed up with EBRD to II, which will predominantly invest in Ukraine. Kazakhstan is create the Kazakhstan Growth Fund aimed at strengthening beginning to emerge as a destination for private equity. Sigma private companies in non-extractive industries in Kazakhstan. Bleyzer, active in Ukraine since 1996, closed Sigma Bleyzer V in In Russia, the Kremlin created the Russian Venture Company December 2007. The fund, oversubscribed at US$221 million, (RVC), a federal state fund of venture funds with US$560 million is targeting investments in Kazakhstan. that provides low-cost financing to early stage innovative compa- Sources of Capital nies. In March 2006, the government of Azerbaijan created the Azerbaijan Investment Company to invest state capital in non-oil Institutional investor interest has increased steadily every year sector companies. according to EMPEA’s 2008 LP Survey. Allocations to CEE/CIS funds rank second only to Asia in emerging market PE strate- gies, with 75% of respondents expecting to invest there within Investment Trends the next five years. More than 37% of investors rated CEE as According to the European Venture Capital Association (EVCA), the most attractive private equity market, with 11% choosing private equity investment in the EU member CEE markets grew Russia/CIS. more than five-fold between 2003 and 2007. Hungary, Poland, The limited partner base for funds in CEE and CIS has been to and Romania accounted for 66% of private equity deals within date primarily European, but funds are increasingly attracting the EU member countries in the CEE in the last two years. As commitments from beyond Western Europe. Advent Internation- of June 2008, investment volume had surpassed US$6.1 bil- al’s fourth fund for the region included allocations from at least lion with 135 transactions in Central and Eastern Europe this two American pension funds. Of the 60 LPs in Mid Europa’s year, registering an average investment size of US$157 million Fund III, half were American, Asian or Middle Eastern investors. according to Capital IQ. Reflecting the increasingly localized na- Marfin Investment Group’s watershed US$7 billion Southeast- ture of investing in CEE, firms based within the region accounted ern Europe fund was raised through a public listing on the Ath- for more than half of the total deal value. ens Stock Exchange.

continued on page 4

The growing sophistication of the CEE markets is exemplified by deals are still occurring. In February 2008, a consortium led by a trend toward later-stage investments and increasing use of BC Partners invested US$3.3 billion to acquire Migros Turk, a leverage. An analysis of the EBRD’s CEE funds portfolio reveals Turkish supermarket chain, financed with debt from local Turk- that buyouts combined with secondary purchases (sales be- ish banks. Ares Life Sciences and Merrill Lynch Global Private tween private equity firms) represented 71% of total investment Equity bought Euromedic, a Hungary-based medical testing value in 2006 overtaking the share of growth capital. Growth company, for US$1.5 billion in June 2008. capital investments remain in the majority of CIS countries, ac- While a handful of notable transactions in Russia in recent counting for 70% of total investment value in 2006. months by European and US private equity firms have illustrat- Use of Leverage ed that leveraged buyouts are feasible, leverage is still seldom used in CIS deals. The first leveraged buyout in Russia occurred In recent years, a growing number of private equity transactions in October 2007, when Lion Capital acquired juice-maker Nidan in CEE have included the introduction of leveraged finance. In Soki for reportedly over US$500 million. This landmark trans- Poland, industry insiders have estimated that a typical mid-mar- action was followed by Lion’s acquisition of alcoholic beverage ket transaction generally involved as much as 50% debt prior to producer Russian Alcohol Group from local private equity firm August 2007. Industrial Investors in July 2008. More recently, after its US$1.4 A 2008 investor sentiment survey by C5 and Squire Sanders billion offer for Russian grocery chain Seventh Continent was revealed that more than half of investors and industry advisers rejected, TPG quickly rebounded by acquiring Russian pharma- saw tightening credit markets somewhat or significantly impact- ceutical distributer SIA International ZAO in an all-equity transac- ing the availability of leverage in the CEE markets. Financing tion of approximately US$800 million. for large deals remains beyond the capacity of most local banks, Other than a few marquis deals, however, Western-style LBOs although a wave of banking consolidation has made leverage have been virtually non-existent in CIS markets. According to generally more available. In recent months, accessing debt has the C5/Squire Sanders survey, 58% of CIS investors claimed to become problematic for transactions of size that dictate reli- never or only occasionally use leverage in their deals. ance on North American or European banks. Sector Trends Despite a slowdown in large buyouts, middle market deals in CEE appear to be going strong. Local sources have expressed Tremendous economic growth averaging over seven percent that overall deal levels are not off. In fact activity in medium- in 2007 is driving private equity investment trends in CEE and sized investments is up thus far in 2008. In addition, some large CIS markets. Within CEE, Lithuania, Slovakia and Bulgaria have

continued on page 5 Sampling of Recent CEE/CIS Deals Fund Manager (s) Company (US$M) Sector Market Date Advent International LaborMed 177 Pharmaceuticals Romania Feb. 08 Baring Vostok Capital Partners Etalon-LenSpetsSMU 80 Construction Russia Mar. 08 Dragon Capital Chumak 38 Food/Beverage Ukraine Mar. 08 Euroventures Ukraine Fund II, Euro Leasing ND Banking Ukraine Apr. 08 Ukraine Opportunity Trust Galt & Taggart Capital mGroup ND Retail Georgia Jun. 08 Icon Private Equity Delta Bank 350 Financial Services Ukraine Jun. 08 J&T Private Equity Czech Energy Holding (CEH) ND Energy Czech Republic Mar. 08 Lion Capital, UFG Private Russian Alcohol Group est. Food and Beverage Russia Jul. 08 Equity, CEDC 540 Marfin Investment Group Sunce Koncern d.d. (“Sunce”) 235 Tourism Croatia Mar. 08 PPF Investments Oriel Resources 271 Industrials Russia Jun. 08 The Carlyle Group TVK Shipyard ND Industrials Turkey Jul. 08 TPG SIA International ZAO 800 Pharmaceuticals Russia Pending as

Source: EMPEA and Biotech of Jul.08

the highest growth rates, and Czech Republic and Slovenia are Number of Investments in CEE/Russia by Sector among those with the highest per capita GDP. Among CIS coun- (Jan. to June 2008) tries, Russia, Kazakhstan and Ukraine enjoyed strong 2007 GDP Energy growth (Russia: 8.1%, Kazakhstan: 8.5%, and Ukraine: 7.3%) Telecommunication Services Healthcare and continue to lead the CIS region in terms of GDP per capita. Utilities In Russia, wages rose more than 30% between 2000 and 2006, Other Materials and per capital GDP is expected to grow to US$12,000 in 2008, Information Te chnology on par with Poland. Consumer Staples Industrials Investors are responding to a surging middle class across Consumer Discretionary the CEE and CIS markets by channeling investment into con- Financials 0510 15 20 25 30 sumer goods, retail, communications, healthcare and financial Source: Capital IQ servic¬es sectors. Among investors pursuing a retail strategy, Penta Investments acquired Russian supermarket chain Semya for US$200m—following on the May 2007 purchase of conve- investors seeking to buy more than a 50% stake in a company in nience store chain Zabka. Moscow-based Baring Vostok recent- one of 42 strategic sectors (e.g. oil and gas, aerospace, media ly announced it would seek opportunities in Kazakhstan’s retail and telecoms), came into force in May 2008. sector. While a significant source of deal flow in 1990s, privatization has Technology, media, and telecommunications remain strong sec- since diminished in importance in the original accession coun- tors for investment. In May 2008, a consortium of firms that tries of Poland, Hungary and the Czech Republic. State-owned included Innova Capital bought 100% of GTS Central Europe, assets are attracting greater attention elsewhere, with varying a leading pan-CEE telecommunications service provider, with degrees of success. In 2007, the Blackstone Group’s bid for €400 million in revenues in 2007. Providence Equity Partners Latvian state-owned telecommunications company Lattelecom invested US$200 million in Ukraine broadband operator Volia was rejected in favor of a share-swap between the government Cable in December 2007. and Teliasonera, a Nordic telecommunications company with a Healthcare has also emerged as a sector of interest in CEE stake in Lattelecom. Ongoing liberalization programs in Turkey mar¬kets in recent months, specifically in drug makers and in preparation for EU accession are expected to provide opportu- distributors, and healthcare operating companies. Mid Europa nities as well, although the rejection of CVCI and Cinven’s recent Partners completed its third deal in Poland’s growing health- bids for state-owned tobacco monopoly Tekel in favor of a British care sector, investing an estimated US$108.9 million in medical strategic investor demonstrated that challenges remain. clinic chain LIM Centrum Medyczne in April 2008. Pharmaceuti- cal deals in the first half of 2008 have included Enterprise In- vestors’ US$54 million injection for pharmaceutical distributor Exit Trends PharmaSwiss, and Advent’s April 2008 acquisition of Romanian Trade sales continue to play a central role in CEE and CIS. Ac- drug producer LaborMed Pharma. Turkey’s healthcare sector is cording to EVCA, 41% of the total number and 60% of the total drawing capital from Middle East investors interest in “soft infra- value of CEE PE-backed exits in 2007 were trade sales. The structure,” such as Abraaj Capital, which invested in Acibadem EBRD, reported that trade sales accounted for approximately Health Services, a hospital services operator, in April 2008. 40% of the institution’s portfolio in 2006.

The sector profile of investments within Russia is in part the In June 2008, Warburg Pincus sold its stake in Euromedic, a function of government restrictions on sectors open to foreign Hungary-based medical testing company, to an Ares Life Scienc- investment. Direct investments in oil and gas interests, account- es and Merrill Lynch Global Private Equity consortium in a deal ing for 20% of Russia’s GDP, remain off-limits, although PE firms valued at US$1.5 billion. In August 2007, Agribusiness Partners can invest in related companies. Russia’s new law on foreign completed its US$144 million exit from Chicken Kingdom, a fully investment, which requires government approval for all foreign continued on page 6

Average Returns for CEE Private Equity Funds (As of December 2007)

80 1 Year 70 3 Year 60

5 Year 50

40 10 Year

0 Dec-03 Jun-04 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Source: Cambridge Associates

integrated Russian producer of fresh and frozen poultry prod- with €2.18 billion during the same period. Poland-based Enter- ucts, through a sale to leading Russian meat processor OJSC prise Investors recently marked its 25th private equity-backed Cherkizovo. In May 2007, Horizon Capital’s Emerging Europe IPO on the WSE with the September 2007 listing of Magellan, Growth Fund (EEGF) sold its controlling stake in Shostka City a leader in the Polish market of financial services for medical Milk Plant to French dairy company Fromageries Bel S.A., report- institutions, bringing in US$105 million in proceeds. edly achieving a gross 5.9 times return and 470% IRR. The Russian Trading System has grown dramatically since its Strengthening capital markets have made IPOs an increasingly beginnings in the 1990s, but subsequently fell by 95% in the attractive exit path, although local capital markets beyond War- 1998 crisis. Since then, many Russian fund managers have saw and Moscow remain underdeveloped. The Warsaw Stock Ex- looked primarily to trade sales as a path to exit, but increasingly change (WSE) hosted 10 IPOs valued at €1.96 billion in the first PE-backed companies are listing in London. In 2006, the most

five months of 2008, second only to the London Stock Exchange recent year for which data is available, 8 Russia-domiciledcontinued on page com 7 - panies listed in London. Sampling of Recent CEE/CIS Exits

Firm Name Company Sector Exit Type Market Exit Date AIG Capital Partners JetFinance International Consumer Finance Trade Sale Bulgaria Nov. 07 Enterprise Investors Medycyna Rodzinna Healthcare Secondary Sale Poland Nov. 07 Global Finance La Fourmi Retail: Supermarket Trade Sale Romania Mar. 08 chain Enterprise Investors Artima Retail: Supermarket Trade Sale Romania Oct. 07 chain Warburg Pincus Euromedic Healthcare Secondary Sale Hungary Mar. 08 AIG Capital Partners AFM Cinemas Retail: Cinema chain Secondary Sale Turkey Feb. 08 UFG Private Equity News Media Group Media Trade Sale Russia Jul. 08 Penta Investments KSC Holding to Logistics: Airport Trade Sale Slovakia Jun. 08 Flughafen Wien AG operator Citigroup Venture Capital National Logistic Logistics Trade Sale Russia May 08 International (CVCI), Company RosEvroGroup Advent International Bolix Paints Manufacturing Trade Sale Poland May 08 CapMan (formerly NORUM) Inmarko Food & Beverage Trade Sale Russia Apr. 08

According to Cambridge Associates LLC, the CEE and CIS pri- TPG, KKR, Cinven Group, and Citigroup Venture Capital are vate equity index indicates improving returns for the region. The only a sampling of the global private equity firms that are com- three-year IRR as of December 31, 2007 reached 59.1%, up ing to Turkey. The Carlyle completed its first deal in Turkey in from 45.8% for the same period in 2006. July 2008 with the acquisition of a 50% stake in TVK-shipyard, a specialized ship-building company. Middle Eastern GPs are A recent study by KPMG of PE-backed exits revealed that the also making forays. In January 2008, Dubai-based Abraaj Capi- majority of Russian exits in 2007 and 2008 had achieved IRRs tal invested in leading hospital operator and insurance provider of more than 30%. A sampling of exits in the last few quarters Acibadem Healthcare Services through its healthcare and infra- tracked by EMPEA reveals returns on CEE and CIS investments structure fund. NBD Sana Capital, a Middle Eastern player, is ranging from 1.4x to 11x, and IRRs ranging from 19% to 48%. currently raising a US$500 million fund that includes Turkey in its investment mandate.

Market Close-up: Turkey Turkey’s private equity industry rose to the fore in 2007 and Private equity has returned to Turkey after a long dormant peri- again in 2008 with two notable leveraged buyouts. The first was od of nearly a decade. Per advisory firm Deloitte, deals in Turkey KKR’s September 2007 acquisition of ferry operator UN Ro-Ro totaled US$2.7 billion in 2007, a dramatic number compared to for US$1.2 billion; debt financed approximately half of the deal. the US$100 million invested between 1995 and 1999. The second was the BC Partners-led consortium’s buyout of supermarket chain Migros Turk, which set records on a regional Veteran local players such as Turkven Private Equity (Advent and global scale as Turkey’s largest deal ever, and third largest International’s local partner) and Bedminster Capital, around buyout globally in the first quarter of 2008. Local banks Garanti since PE’s beginning in Turkey, have gone on to raise ever- Bank, Is Bank, and Vakifbank Bank financed half of the transac- larger successor funds. Turkven most recently raised a fund of tion. Leverage was introduced to the Turkish market with TPG’s US$428 million. June 2006 investment in Mey Icki, the country’s largest produc- In other cases, fund managers driven away by deteriorating eco- er of the national liquor in a deal valued at US$810 million. nomic conditions earlier in the decade are returning. AIG Capital State-owned enterprises remain a potential source of deal flow Partners, which closed its local affiliate in 2004 after failing to for private equity investors, although successful privatization pro- raise the full US$100 million for their Blue Voyage Fund (BVF), grams over the past two decades have depleted the remaining have since restarted operations and rehired the original BVF di- opportunities. PE consortia, including Citigroup Venture Capital rector, Serkan Elden, to resume management of the fund. International and Cinven Group were recently outbid in Turkey’s In 2007, local veterans were joined by Actera Partners, which auction for state tobacco monopoly Tekel. British American To- raised the largest Turkey-dedicated fund to date with US$475 bacco (BAT) won the auction. Reflecting the still novel presence million with anchor investments from Canada Pension Plan and of private equity in Turkey, the former head of Turkey’s privatiza- The Ontario Teachers Pension Plan. More recently, AccessTur- tion administration commented, “It was good for competition in key Capital Group, investing in Turkey since 1999 through ven- the domestic market the tender had gone to a tobacco producer ture arm iLab Ventures, announced the launch of a €250 mil- rather than a private equity fund, as BAT will view the tobacco lion private equity fund focused on mid-market buyouts. division as a strategic investment.”

Skyline of Maslak financial district in Istanbul, Turkey. Photo by Kerem Barut. Kerem by Photo

Fund Manager Fund Name Geographical Focus CEE-Focused Funds

3i Capital Partners Eurofund V (2006, US$5.2b) Pan-European, CEE 3TS Capital Partners 3TS-Cisco Growth Fund III (2008, US$40m) CEE 7L Capital Partners 7L Capital Partners Emerging Europe (2006, US$130m) Southeastern Europe AccessTurkey Capital Group Access Turkey Fund (Name TBD) (raising, US$250m) Turkey Actera Partners Actera Partners Fund I (2007, US$475m) Turkey Advent International Advent Central & Eastern Europe IV (2008, US$1.6b) CEE Bedminster Capital Management Southeast Europe Equity Fund II (2007, US$320m) Southeastern Europe East Capital East Capital Bering New Europe Fund (raising, US$150m) CEE, Balkans Enterprise Investors Polish Enterprise Fund VI (2006, US$776m) Poland European Investment Fund (EIF) Istanbul Venture Capital Initiative (iVCi) (2007, US$300m) Turkey GED Private Equity GED Eastern Fund II (2006, US$200m) Southeastern Europe Global Finance SA South Eastern Europe Fund (2006, US$389m) Southeastern Europe Innova Capital Innova Fund IV (2006, US$350m) Central Europe KD Private Equity KD South East Europe Fund (raising, US$109m) Southeastern Europe Krokus Private Equity Nova Polonia Natexis II (2006, US$132m) Poland Marfin Investment Group Marfin Private Equity Fund (2007, US$7b) Southeastern Europe Mezzanine Management Accession Mezzanine Capital II (2007, US$386m) Central Europe, Balkans, Central Europe Russia, Ukraine Mid Europa Partners Mid Europa Fund III (2007, US$1.4b) CEE Penton Partners Central European Selected Opportunities Fund (raising, US$100m) Poland

CIS-Focused Funds AIG Russia Century Fund (2007, N/A) Russia, CIS Alfa Capital Partners Alfa Private Equity Partners LP (2006, US$250m) Russia, Ukraine Almaz Capital Partners Almaz Capital Russia Fund (raising, US$60m) Russia Aureos Capital Aureos Central Asia Fund (2007, US$50m) CIS Baring Vostok Capital Partners Baring Vostok Private Equity Fund IV (2007, US$1.45b) Russia, CIS CapMan Plc CapMan Russia Fund (formerly Norum Russia III) Russia (raising, US$138.8m) Centras Capital Partners Centras Private Equity Fund (2007, US$50) CIS Da Vinci Capital Management Da Vinci CIS Private Sector Growth Fund (raising, US$110m) Russia, CIS Delta Private Equity Partners Delta Private Equity Partners Fund (TBD) Russia (raising, US$550) Draper Fisher Jurveston (DFJ) DFJ-VTB Aurora Fund (raising, US$150) Russia Eagle Capital Partners Eagle Capital Partners Fund (2008, US$24) Russia Eurasian Private Equity Group EPEG Small Company Buyout Fund (raising, US$50m) Russia GIMV Eagle Russia Fund (2006, US$100m) Russia Horizon Capital Emerging Europe Growth Fund (raising, US$300m) Ukraine, Moldova, Belarus Icon Private Equity Icon Private Equity Fund (2007, US$1b) Russia Kala Capital Georgian Investment Fund (raising, US$1.5b) Georgia Kazyna Kazakhstan Growth Fund (raising, US$125m) Kazakhstan Mint Capital Advisors Limited Mint Capital III (raising, US$250m) CIS Quadriga Capital Russia Quadriga Capital Russia Private Equity Fund II (2006, US$137m) Russia Renaissance Partners Renaissance Private Equity Fund I (2008, US$660m) Russia, CIS SigmaBleyzer SBV V (2007, US$260m) Kazakhstan, CIS Siguler Guff & Company, LLC Russia Partners III (raising, US$850m) Russia Troika Capital Partners Troika Capital Partners Growth Fund III (raising, US$1b) Russia UFG Private Equity UFG PE II (2008, US$500m) Russia