IFC Invests €15M in V4C Poland Plus Fund II to Boost Growth of Lower Mid-Market Companies in CEE

V4C II focuses on lower mid-market investments in both digital and traditional services sectors within CEE, primarily targeting Poland and Romania.

The International Finance Corporation (IFC) is investing up to €15 million in the V4C Poland Plus Fund II (V4C II), a new private equity fund aimed at supporting lower mid-market companies in the Central and Eastern Europe (CEE) region. This investment will provide vital access to financing and expertise, enhancing the growth and competitiveness of businesses in the area.

V4C II focuses on lower mid-market investments in both digital and traditional services sectors within CEE, primarily targeting Poland and Romania. The fund plans to acquire majority stakes in portfolio companies to strengthen management teams, optimize operations, implement expansion strategies, and assist in merger and acquisition transactions.

Despite a challenging fundraising environment, V4C II surpassed its original target size of €100 million, thanks to IFC's support. Additionally, IFC is aiding Value4Capital in enhancing its gender lens in investing and reporting, aiming to better measure gender diversity in private equity-owned companies.

"Our second independent fund will follow the successful strategy of our first fund, focusing on founder/owner transition situations and looking to capture the fundamental growth of our domestic markets. With IFC's support, we have been able to mobilize even more private capital in this fundraising and increase our fund size along with the growth of our target market," said William R. Watson, Managing Partner of Value4Capital.

Private equity fundraising has become increasingly difficult in CEE following Russia's invasion of Ukraine and the post-pandemic global economic slowdown. In 2023, the region experienced its lowest fundraising volumes since 2015, with a total of €812 million raised. IFC's investment aims to support an emerging small to mid-market fund manager and signal other funds seeking to raise capital in the region.

"Supporting access to finance through private equity capital is key to promoting innovation and unlocking new pathways for sustainable economic growth," said Ary Naïm, World Bank Group Country Manager for Poland and IFC Manager for Central and South Europe. "This investment builds on our recent support to other funds in the region, helps sustain activity in a challenging environment, and supports market recovery by encouraging commercial investors to return to the market."

For over 20 years, IFC has supported the development of private equity funds in Eastern Europe, with investments totaling over $420 million in 20 private equity funds across CEE to date.