Horizon Capital, a U.S. private-equity firm investing in high growth and export-driven companies in Ukraine and the near region, has closed its third fund, attracting $200 million in new investment. The Emerging Europe Growth Fund III, L.P. surpassed its $150 million target.
In a Jan. 23 press release, Horizon said the development “marks the largest private equity fund raised for Ukraine in a decade,” citing strong backing from existing and new investors. Horizon said that the investors were “attracted by the excellent value, fast growth and an abundance of opportunities that Ukraine offers.”
Led by founding partners Lenna Koszarny and Jeffrey C. Neal, as was well as senior partner Denis Tafintsev, Horizon now manages more than $850 million in assets from investors with a capital base exceeding $350 billion. Its Ukraine-focused funds have invested more than $650 million in 140 companies employing over 46,000 people.
“Our fundraising success should send a strong signal that Ukraine offers tremendous rewards for those willing to look past the headlines,” Koszarny, who is also Horizon Capital’s CEO, said. “This fund is a testament to our long-term, valued investor relationships, our strong team of talented professionals and export-focused investment strategy, and our solid track record of successful investing in this country. Since our first close last year, the new fund has already made six compelling investments and will close many more exciting deals in the years to come.”
EEGF III was launched with an anchor commitment from Western NIS Enterprise Fund, according to the press release, and attracted investments from the European Bank of Reconstruction and Development, International Finance Corporation, FMO, PROPARCO, DEG, IFU, with over one-third of capital raised from institutional investors, foundations, family offices and other private investors. The new fund enjoys strong backing from existing investors of Horizon Capital’s prior funds, who contributed more than 55 percent of total commitments, according to the press release, which said that U.S. and Europe-based investors contributed roughly 35 percent each of total capital raised, with the remainder from other international investors.
EEGF III’s investment strategy is focused on fast-growing, export-oriented companies that leverage Ukraine’s cost competitive platform to generate global revenues primarily in information technology, light manufacturing, food, and agriculture, according to Horizon Capital. The fund will also pursue investments in e-commerce, healthcare and pharma, consumer goods and financial services. Investments will range from $5-$20 million and be made over the next 2-3 years.
Neal, who is also chairman of the investment committee at Horizon, praised his colleagues, including Denis Tafintsev, Vasile Tofan, and Konstantin Magaletskyi, saying that “Horizon Capital has reached new heights. I am confident in our team’s ability to back visionary founders and deliver solid returns to our investors.”
EEGF III has made six investments to date, five in the core sectors driving Ukraine’s export boom and best-positioned to access global markets, including IT, light manufacturing and food and agriculture, the press release said. The fund has backed Genesis, a global IT product company; Intellias, a fast-growing large IT services company; Yarych, a leading biscuits producer; and MAIB, the top bank in Moldova, among others.
Horizon’s latest fund builds on the success of its previous funds: $370 million EEGF II launched in 2008 and $132 million EEGF I launched in 2006. EEGF III is the first Horizon Capital growth equity fund focused primarily on IT and export-oriented companies in their market.
Horizon Capital says it is the leading private equity firm in Ukraine, backed by over 40 institutional investors with over $850 million under management in four funds. The firm positions itself as “a value-added investor, backing visionary entrepreneurs leading transformational businesses in Ukraine and the near region.”
