The new fund in which the EBRD will participate as a cornerstone investor, Alpha Russia & CIS Secondary L.P., aims to raise up to US$300 million. The fund will be managed by Alpha Associates Group, an independent private equity manager based in Switzerland.

The fund will mainly target the secondary market in private equity funds. However its strategy will also include primary commitments to new private equity funds, as well as direct co-investments in selected companies alongside reputable and experienced lead-investors.

By replacing investors affected by the recent financial turmoil, the fund will play a crucial role in supporting the real economy in these countries through the provision of much needed equity capital to the private sector, thus dove-tailing with the EBRD’s crisis response strategy for the region.

”Developing sustainable private equity markets is a key priority for the Bank. A liquid secondary market will help private equity as an asset class to function as efficiently in the region as it does in the US and European markets” said the EBRD’s First Vice President, Varel Freeman.

”The post-crisis environment presents excellent opportunities to buy solid private equity assets in the region from investors restructuring their portfolios. The opportunity today resembles that after the 1998 crisis when attractive returns were generated by Russian private equity, the difference being that this time the Russian economy is incomparably stronger,” said Petr Rojicek of Alpha Associates.

The EBRD has a long standing relationship with Alpha Associates having participated as a cornerstone investor in Alpha CEE II L.P.

The EBRD manages the largest private equity fund investment programme dedicated to the region. Excluding property funds, the Bank has to date committed EUR 2.7 billion (US$3.6 billion) to 125 funds. These have raised capital totalling EUR 13.6 billion (US$18 billion).