Spring Will Be First True Polish Independent

Two former members of Renaissance Capital’s Polish investment team have formed Spring, an independent venture management group that is currently in the market with a $55 million (euro 50 million) Poland fund, Spring Capital. If Spring reaches a successful closing, it will be the first Polish fund raised by an independent local team without a Western partner or institutional sponsor.

Jacek Witak said that he and his colleague Jacek Klos decided to go it alone last autumn after ABN AMRO announced its intention to take over the Renaissance Capital management group. Whereas Renaissance Capital has a regional focus, the first Spring fund will focus purely on Poland. “It was not a hostile separation, but we took a different view [from Renaissance] concerning investment opportunities in Eastern Europe over the next three to four years”, said Jacek Witak; “In comparison with its neighbours, Poland has a strong economy and a stable political climate and its private equity market, although young, has already shown itself to be efficient and has generated a number of successful exits”.

Spring Capital is targeted at the sub-$5 million segment of the market. Spring will necessarily adopt an opportunistic approach, because the Polish economy is not yet sufficiently developed to support a sector-specific fund. Jacek Witak predicts, however, that much of Spring’s deal flow will emanate from the nascent services sector, the software and IT services industry and branded goods businesses.

Approximately three quarters of the fund will be deployed in development-stage investments, which Spring defines as companies with a four- to six-year realisation horizon, while the balance will be available to fund start-ups. Summarising Spring’s strategy, Jacek Witak said “We are open to entrepreneurial, but not to technical, risk”.

Subject to formal board approval, the European Bank for Reconstruction and Development, which was a key investor in European Renaissance Capital, will commit 20% of Spring Capital’s target. The new fund has also attracted support from Frank Bonsal, the founding partner of New Enterprise Associates, and Pitch Johnson, one of Renaissance’s founders. Jacek Witak reported that Spring is currently talking to one UK and two US funds-of-funds and hopes to close the fund this April.

Spring’s founders have selected three further investment executives, who will join Spring following the fund’s closing.