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Investments

The objective of the funds managed by SDCF Venture Management is to achieve medium to long term profitable growth by investing in the share capital of financially sound, well managed private sector companies. SDCF's managers have a great track record in achieving this goal.

In many of the European countries in transition, debt financing (short, medium and long term) was available for investment into the commercial/industrial sector in 1990's. However, there remained an acute shortage of equity type financing i.e. long term finance for investment in the share capital of companies. In order to resolve this problem, funds such as the Slovenian Development Capital Fund (SDCF) had been established by SDCF Venture Management to attract equity resources from international institutions to the countries in transition.

While such funds existed in some quantity in the larger European countries at the time, there were relatively few in existence in the smaller nations. SDCF was the first equity fund for Slovenia focused on medium scale enterprises and was co-sponsored by the International Finance Corporation (IFC) and the European Bank for Reconstruction & Development (EBRD). In addition, SDCF had attracted a broad base of international investors as well as strong investor support from the Slovenian financial and business community.

The profit was attained over the eight year life of the Fund, initially in some cases from interest income, but thereafter principally from capital gains derived through trade sales, management buyouts, or the sale of the investments on the Slovenian or other stock exchange. The Fund had commitments from investors of US $20.5 million and began operation in the latter part of 1995. Fifty percent of the funding came from IFC and EBRD. The remaining 50% had been financed by a mix of international investors and Slovenian financial institutions/business. The two leading Slovenian Banks Nova Ljubljanska Banka and SKB Banka were the major Slovenian investors in the Fund. Funds were drawn down from investors over a 2-3 year period as investment opportunities were identified.Investments were made at significant discount to value and offered high IRR for low-risk investments. Exits were made primarily via public market. 10 out of 11 investments were profitable. Obtained IRR of 23 % was 15 % higher than planned 20 %.

With the continuity of the fund management, SDCF Venture Management is continually tracking investment opportunities and presents them to investors. Some examples of successful investment in Slovenia are Terme Olimia, Lek, Fructal and Trimo.

Terme Olimia

terme olimia

Deal: 1996
Share: 14%
General Manager: Zdravko Počivalšek
Business: health spa + vacation resort
Headline: Became one of top players in the region in Spa industry
Exit: Sold in 2003 with a multiple of 2,5 (sold to strategic investors)

Lek

lek

Deal: 1997
Share: 1,7%
General Manager: Ciril Dragonja
Business: pharmaceutical
Headline: Was sold to Novartis – Sandoz division
Exit: Sold in 2003 with a multiple of 5x (Taken over by competitor- Novartis)

Fructal

fructal

Deal: 1997
Share: 12%
General Manager: Cvetana Rijavec
Business: food & beverage
Headline: Taken over by Union brewery with share exchange
Exit: Sold in 2004 with a multiple of 6 (In a takeover bid for Union Brewery between Interbrew and Lasko Brewery)

Trimo

trimo

Deal: 1996
Share: 14%
General Manager: Tatjana Fink
Business: steel construction & panels
Headline: Grew to No 1 player in the industry in SEE region
Exit: Sold in 2003 with a multiple of 4x (Management buyout)

SDCF Venture Management invests money into private companies which require additional long term financing to purchase, for example, necessary new equipment for expansion, diversification, rehabilitation, etc. Our Funds investees are never new high risk companies or speculative activities. They are always in line with the objective of SDCF Venture Management: to achieve medium/long term profitable growth by investing in the share capital of financially sound, well managed private sector companies.

SDCF, družba tveganega kapitala d.o.o.

Trdinova ulica 4 1000 Ljubljana Slovenia

Phone: +386 1 432 40 38
Mobile: +386 41 63 98 16
Fax: +386 1 231 35 27