By the end of the year, five new venture capital funds in Croatia

Thanks to the Government’s initiative called Funds for Economic Cooperation (FGS), by the end of 2010, there will be five new venture capital funds, which will further increase the amount of venture capital investment in Croatia by an additional 170 to 200 million euros.

This was highlighted at a media briefing by Mirna Marović, president of the Croatian Private Equity and Venture Capital Association (HVCA). Currently, in the process of establishment, alongside the already established Nexus FGS and Quaestus  Private Equity II, are Alternative Private Equity FGS, Prosperus FGS, and Honestas Private Equity FGS.
On average, Marović continued, for every kuna invested by the venture capital fund, a prospective company can attract an additional five kunas from other sources of financing, and it is important to emphasize that investments are made on market principles and that the state and the private sector participate equally. “First, private funds are attracted, and then the state contributes to that,” added Marko Makek, vice president of HVCA, who emphasized that this marks the beginning of a stronger development of such an industry in Croatia.

Regarding the sectors from which projects are expected, energy is currently the most desirable, and there is also significant interest in the IT sector, manufacturing, and the recycling-related industry.  The structure of investors was explained by HVCA board member Vjenceslav Terzić, noting that global trends indicate that 20 to 25 percent of investments come from the pension industry, followed by other financial institutions, foundations, corporations, and finally from wealthy private individuals. In Croatia, the structure will be very similar, says Terzić, except that there will be no wealthy private individuals. The first investments are expected in the first quarter of next year, and work is currently underway on a project database that will be available to potential investors.  (J. T.)