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. Last Updated: 07/27/2016

U.S. Group Plans Polish Fund

WARSAW -- U.S. Pioneer Group Inc. plans to launch in November a


$50 million closed-end fund to invest in Polish unlisted private and privatized companies, a Pioneer official said.


"We plan to close the subscription for shares in the new Pioneer Poland Fund by the end of October," said Alicja Malecka, the president of Pioneer's Polish subsidiary and of the newly founded Pioneer Investment Poland.


Malecka told a news conference the Pioneer Group would invest $5 million in the fund, while the remaining shares would be subscribed by U.S. and British investment funds, U.S private companies and two international consulting firms.


She said the fund's capital would not exceed $100 million.


Malecka said the fund would invest in textile, food processing, transportation and services firms, which would offer potentially high returns at a moderate risk.


"The fund will be focused on taking advantage of a high growth potential of Polish firms but at a moderate risk so the fund will not invest in new ventures," Malecka said.


"We are interested in companies which can boast high potential but lack capital and expertise," she added.


Malecka said work on the project began almost a year ago but its launch has been delayed after several potential partners, mainly U.S. pension funds and investment banks, pulled out disappointed with delays in Polish mass privatization program.


"Those institutional investors say that as long as there is no mass privatization program it is a sign the Polish government wants to keep the state sector intact and they fear an unfavorable climate for private companies," Malecka said.


"That is why we had to search for a different type of investor, willing to take bigger risks, seeking more speculative gains or for other reasons interested in Poland," she added.