Dresdner Launches Central Europe Fund –

Dresdner Kleinwort Benson this month is readying the launch of a $250 million private equity fund to invest in Central Europe.

The offering represents one of the largest private equity funds ever sought for the region.

The bank plans to raise much of its capital from U.S. investors, sources close to the bank said. Cheryl Halpern, a vice president at Dresdner Kleinwort who is helping to direct the U.S. fund raising, declined comment.

Dresdner Kleinwort Emerging Europe, L.P. will target middle market consumer companies in Poland, Hungary, the Czech Republic, Slovakia, Romania and Bulgaria.

One U.S. G.P. who invests in Central Europe said he believes the bank can put the capital to work if it can raise the effort. “I think that’s an ambitious goal but one that the region could handle,” said Bela Szigethy, managing general partner at The Riverside Co. that currently is investing a $30 million Central Europe Fund.

He cautioned that Dresdner Kleinwort only had about six bankers that focused on the region and that the private equity team likely would need to generate some of its own deal flow.

Mr. Szigethy said a firm can make sizable investments in the region by combining industries in different countries. For example, Riverside last month closed an investment in a Polish valve company-Zetkama S.A. (paying a 3.8 times EBITDA multiple)-that it plans to merge with a Poland and a Czech valve company. Once the platform is complete, the group will try to sell the entity to an international valve maker.

As for the recent strife in Kosovo, Mr. Szigethy does not believe it will have an impact on buying opportunities in the region because companies since the Bosnian war have had a difficult time exporting goods to Serbia. However, he does believe the turmoil could hurt fund raising by making investors squeamish.

To help its chances, Dresdner Kleinwort last month hired Ms. Halpern, a former fund raiser for WestSphere Equity Investors, as a vice president in its North America placement group.