Transcript Slajd 1

Financing of hi-tech sector and advanced technologies
in Poland through venture capital market development
Piotr Pietrzak – Investment Manager
About us
TYPE OF BUSINESS
(first Polish) Venture Capital Fund of Funds
LEGAL STRUCTURE & OWNERSHIP
Joint stock company, established in 2005 by BGK,
according to the Act of Parliament
MISSION
Limiting equity gap in early stage investments up to
1,5 million EUR
PRODUCT
Investment of public financial and intellectual
capital in newly created VC funds
INVESTMENT PROCESS
Based on the best examples of Israeli, European
and American funds of funds; selection of GPs
and private LPs through open tendering process,
deal structuring, hands-on monitoring, exits
ASSETS UNDER MANAGEMENT
~250 m USD *
SOURCES OF FINANCING
Owner’s equity, Polish Gov., EU, Swiss Gov.
TEAM
10 investment professionals (+ back office)
* USD/PLN @ 1/3,5
VC in Poland
before KFK (2004)
NUMBER OF PE/VC FUNDS
28
TOTAL AMOUNT INVESTED
174 m USD * (63% in Polish companies)
AVERAGE SIZE OF INVESTMENT
8,2 m USD *
STAGES OF DEVELOPMENT
 Buyouts & replacement capital: 67%
 Growth: 33%
 Seed & start-up: 0%
Polish PE/VC market in 2004 consisted of 28 funds, usually managed by Polish GPs and foreign LPs
(EBRD, Banks, Insurance Companies, Pension Funds and corporations)
From the early 90’s – the beginning of Polish PE/VC industry, in 15 years the market naturally evolved
towards larger transactions, mostly buyouts and replacement investments in mature, traditional
businesses, and only half of them located in Poland; none in early stage
* USD/PLN @ 1/3,5
Our VC funds
NUMBER (now/end of 2012)
15 (9 active, 6 in organization)/20+
COMMITMENTS (now/end of 2012)
288/410 m USD *
 KFK (now/end of 2012)
158/225 m USD (typically 50%)*
SIZE
10-30 m USD *
LEGAL FORM
Limited Partnership, Closed-End Fund
(Polish law, tax transparent)
PREFERENCES (for private LPs)
First-to-exit (downside protection),
ECONOMICS
Total cost of running the fund (inc.
management fee) below 3% p.a.; up to
10% of KFK commitment in form of
grant (technical assistance)
4+1 (until 2015-16)/10+2
Polish innovative SMEs with high growth
potential; up to 1,5 m EUR in single
company
INVESTMENT PERIOD/HORIZON
INVESTMENT STRATEGY
* USD/PLN @ 1/3,5
AQUARIUM
Venture Fund
AVANU
VC Management
Our VC funds’
investments
NUMBER (now/2016)
25/200+
TOTAL AMOUNT INVESTED (2016)
300 m USD *
SIZE (average)
0,1-1,7 (0,7) m USD *
STAGES OF DEVELOPMENT
Seed (60%), start-up, expansion
SECTORS
ICT (50%), industry, healthcare,
software, others
In less than 3 years from the start of its full investment activity, in the middle of the
global financial crisis, KFK has created (together with private investors) 15 new VC
funds of total capitalization nearing 300 million USD, with strategy to invest in the
highest risk, early stage SMEs
* USD/PLN @ 1/3,5
Opportunity
& perspectives
GROWING NUMBER OF GPs
VC managers, successful entrepreneurs, business
angels, ex PE managers, multinational companies’
and M&A managers, financial and business advisors
KFK activity encouraged Polish professionals (50+) from different institutions and market sectors
(even mature PE) to become VC managers (in some cases also investing their own money)
GROWING NUMBER OF LPs
Companies listed on WSE, successful entrepreneurs,
business angels, qualified investors, investment funds,
banks (soon), pension funds (soon)
KFK activity encouraged Polish individuals and institutions (90+) to invest their money (some of them
for the first time) in such risky asset class (investors committed 144 m USD *)
KFK track record convinced also the successful Israeli investors and fund managers – GIZA, to launch
their VC operations in Poland
* USD/PLN @ 1/3,5
Opportunity
& perspectives
GROWING DEALFLOW
OF INVESTEE COMPANIES
~1,7 m Polish SMEs (99,8% of all companies)
4 billion EUR of EU money for Polish SMEs
in 2007-2015 (majority in form of grants)
30 technology parks
45 business incubators
After Poland became the member of EU, the variety of grants, micro- and pre-seed financing available
for Polish SMEs from structural money consistently builds the potential deal flow for KFK portfolio
funds
ROLE OF KFK




TEACH
LEARN
EARN
DEVELOP
Market standards, expertise for emerging VC markets
Global approach (foreign teams, investors)
Hands-on monitoring, reinvesting (evergreen fund)
New stages (growth funds), new profiles (pre-seed,
proof-of-concept, scientific funds), new investors
(big institutional)
The strategic role of KFK is to become „European Investment Fund” for CEE – the largest public
investor with added value in VC asset class, setting best market standards, practices and expertise
From the point of view of investment activity, Poland has currently
a unique opportunity to become a leader in the CEE region in
incubating the most innovative businesses with global potential
Thank you