East Capital Financials Fund sells holding in Bank of Georgia
The East Capital Financials Fund (ECFF) has today sold its 10.17% stake in London Stock Exchange listed Bank of Georgia Holdings PLC (BGEO). The fund received close to EUR 57m for its stake in BGEO which, together with dividend income received during the holding period implies a total cash on cash return of 65% on the investment in euro terms. The sale proceeds correspond to roughly a fifth of the fund’s end-January NAV.
The East Capital Financials Fund is a private equity fund launched in 2006 with a term of seven years, plus three possible one-year extensions. As the first extension period has already begun, the fund manager is focusing on divestments. Since its initial investment in Bank of Georgia in 2006, the Fund has been represented on the Board of Directors of the Bank and has actively worked with the Bank’s management to develop the business. Over the past 7 years, the Bank has been transformed into the undisputed leader of the Georgian banking sector, with over 30% market share, showing consistently strong financial and operating performance, and paying yearly dividends to shareholders. The premium listing of the stock on the London Stock Exchange in February 2012, and its subsequent inclusion in the FTSE 250 index in June were the culmination of years of work to both grow the business and to make the stock available to a broader audience of investors. The fund’s management team still sees plenty of potential in the company.
“We are very pleased with the strong development of Bank of Georgia and the return it has contributed to the fund’s portfolio. However, as East Capital Financials Fund has entered its divestment phase, the time has come for the fund to exit this holding. We still believe strongly in the company and its management. The buyer interest demonstrated during the sale of our position confirms this view”, commented Kestutis Sasnauskas, CEO of East Capital Private Equity.
Kestutis Sasnauskas, CEO of East Capital Private Equity
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About East Capital
East Capital is the leading independent asset manager specializing in the emerging markets of Eastern Europe and China. The company, founded in 1997, bases its investment strategy on thorough knowledge of the markets, fundamental analysis and frequent company visits by its investment teams. East Capital actively manages EUR 4 billion in public equity, private equity and real estate. It is headquartered in Stockholm, with offices in Hong Kong, Kyiv, Moscow, Oslo, Paris, Shanghai and Tallinn.
The East Capital Financials Fund is a EUR 500 million private equity fund which makes equity investments in companies within the financial sector in Eastern Europe.