Aureos Raising Central Asia Fund

Aureos Capital has held a $50 million first closing for its Central Asia Fund, with a $100 million final close expected by next June. The fund will invest between $2 and $10 million in companies located in such countries as Kazakhstan, Azerbaijan, the Kyrgyz Republic, Georgia, Tajikistan, Turkmenistan and Uzbekistan.




The Aureos Central Asia Fund (ACAsF) has raised US$50 million at its first fund closing. The fund is an initiative of Aureos Capital, a leading private equity fund management company specialising in investing in small to mid-cap businesses through regional funds across Asia, Africa and Latin America.


The fund, which is expecting to have a final close at US$100 million by June 2008, will seek to make investments of between US$2 million and US$10 million.


Apart from Kazakhstan, the fund will actively be looking for investments in Azerbaijan, the Kyrgyz Republic, Georgia, Tajikistan, Turkmenistan and Uzbekistan.


Sev Vettivetpillai, CEO of UK based Aureos Advisers, which provides funds advisory services to Aureos Capital, says: “Central Asia's economy is growing rapidly and medium-sized businesses are seeing more opportunities for regional expansion, so we believe that it is the right time for Aureos to enter the market.”


Talgat Kukenov, the Managing Partner of the Aureos Central Asia Fund, based in Almaty says: “The demand for private equity amongst potential investee companies to supplement bank lending is now very strong.”


“So far private equity funding has been targeted at the very largest companies. The Aureos Central Asia Fund will help fill the void and enable small to mid-cap companies to expand, by specifically focusing on this segment of the market.”


Says Talgat Kukenov: “We have a strong team, all with substantial private equity experience from within the region. We believe we are the only fund manager in the region with a team that includes members who have worked together in this field before.”


“Private equity is still a young and underdeveloped asset class in Central Asia. When targeting the SME sector, time is needed to show the entrepreneurs how private equity can fulfil a company's growth targets. Our experience and knowledge in this area will give investee companies a distinct advantage.”


Tamerlan Hamidzada, Partner in Aureos Central Asia Fund and Azerbaijani by origin with substantial private equity experience in his country adds: “Significant economic growth in many of the region's economies has led to an expansion of a middle class which boosts consumer demand and creates new opportunities in domestic markets.”


“SME private equity, when executed properly, may very profitably fill in the void created by the underdeveloped banking system in Azerbaijan and the current liquidity crunch in the Kazakh banking system. The SME sector is very vulnerable to fluctuations in local capital markets and often is the first to be cut off from financing sources. In this situation private equity may take an active role in supporting the fittest of them and enhancing their value.”


“We expect the majority of our investments are going to take place in manufacturing, consumer goods and the general services industry. As well as consumer demand driving the value of these businesses, the opportunity to create cross-border links in the region will also be an important factor.”


The Aureos Central Asia Fund is still open to investors.


Aureos Capital Ltd is a unique private equity fund management company, domiciled in Mauritius, which specialises in providing expansion and buy-out capital to unlisted mid-cap businesses across Asia, Africa and Latin America.


It was formed in July 2001 to assume management of 14 funds originally sponsored by CDC Group plc (the legacy portfolio) and to raise and manage a new generation of private equity funds under the Aureos brand, focusing on expansion and buy-out opportunities.


Since inception, Aureos has achieved 117 exits and as a result today's legacy portfolio comprises only 23 investments. The legacy portfolio consisted of a large number of early stage venture investments in frontier markets.


Over the same period, since 2001, Aureos has more than trebled its funds under management and has raised and/or managed over US$500 million and extended its geographical footprint to over 50 emerging markets.


Apart from Aureos employees, Aureos shareholders include CDC Group plc, Norfund and FMO which are, respectively, the British, Norwegian and Dutch development finance institutions. 


Investors in Aureos funds include institutional investors, foundations and trusts, family groups, high net worth individuals, development finance institutions and multilateral development banks.


Since the beginning of 2001 Aureos has established the following funds:


  • Aureos Central America Fund: US$36.3 million
  • Aureos East Africa Fund: US$40.0 million
  • Aureos West Africa Fund: US$50.0 million
  • Aureos Southern Africa Fund: US$50.0 million
  • Aureos South Asia Fund: US$122.4 million
  • Aureos South-East Asia Fund: US$91.0 million
  • Emerge Central America Growth Fund: US$21.0 million
  • Aureos Malaysia Fund: US$25.0 million


Aureos is in the process of raising funds for:


  • Kula Fund II (Pacific Islands): committed capital US$16.0 million; target capital US$25.0 million
  • Aureos China Fund: committed capital US$34.5 million; target capital US$70.0 million
  • Aureos Central Asia Fund: committed capital US$50.0 million; target capital US$100 million
  • Aureos Latin America Fund: target capital US$300 million (1st close expected in November 2007).


In 2008, Aureos is planning to establish the Aureos Africa Fund of approximately US$400 million.