Банкеръ Weekly

Briefs

WE WANT TO HELP FOR THE COMPLETION OF THE TRANSITION PERIOD

Michael Bleyzer, President and CEO of SigmaBleyzer, to the BANKER weeklyIn the late 1970's a young and ambitious Michael Bleyzer made a daring escape from his native Ukraine and the economic oppression of communism, taking nothing but his two dearest possessions, his wife and three-year-old daughter. When the family arrived in Texas in 1978 they had no money, no friends and no acquaintances. Fortunately, the political refugee and immigrant escaped with an excellent education, which served him well as he strived for success in his adopted homeland. Taking a wide range of jobs, he gained the experience that would lead him to management consulting and finance positions, including a prominent post at Ernst Young's management consulting practice. Mr. Bleyzer also held management roles at Exxon Corporation during his 13-year stint at the energy giant. And it was there, at Exxon's Brussels office in the early 1990's, where a renewed interest in the Ukraine began to emerge. In 1993, two years after the breakup of the Soviet Union, Michael found himself back in Ukraine to lay down the foundations for what would eventually become one of the best investment banking organisations in Ukraine, SigmaBleyzer. The President and CEO of the firm focused on Foreign Direct Investment because he realized this is the only reliable source of financing, and the largest one at that, for transition economies. Mr. Bleyzer, how would you present your company?- SigmaBleyzer is an American company, established ten years ago. We make investments and conduct economic analyses in Eastern Europe and the states of the former Soviet Union. We stepped initially in Ukraine due to sentimental reasons as I was born there. The company manages a family of three investment funds, united under the common name Ukrainian Growth Funds (UGF), with aggregate capital of over USD100MN. The funds were set up in the mid 1990's.These are typical venture capital funds, aren't they?- No, I wouldn't say so. SigmaBleyzer invests in companies which have already established themselves on the market. We were among the most active players in the process of privatisation in Ukraine. We were initially purchasing minority packages of shares, but after the collapse of the Russian market in August 1998 our strategy changed quite a bit. We changed from a portfolio investment strategy to a private equity strategy. Of the 60 companies in our portfolio, 15 are private equity holdings. Over the last five years were managed to sell successfully our shares in 40 companies. I guess your operations are not limited to fund management...- A curious detail is that part of our business is connected with the non-government sector. In 2001 we established the Bleyzer Foundation, a non-profit NGO, to support the transition of former Soviet Union and other ex-communist countries into healthy, democratic market economies. We analyze the economic reforms in the countries where we operate. The foundation's motto is Let's turn transition into prosperity.Mr. Bleyzer, is your visit in Bulgaria related with any concrete investment intentions?- Yes it is. We have made a decision to launch a regional fund which will be South Eastern Growth Fund (SEGF). It will help severel groups of countries. The fund will have different priority tiers. Number one priority will be Bulgaria and Romania, which means that the fund will invest more in these countries.Many people would be surprised at your choice. Why did you direct your attention to these two countries?- The reason is that they have been developing very well but have not yet reached the level of Hungary and Slovenia for example. I would say the companies there have reached their utmost market price. Our strategy is to acquire shares in a firm at a certain price, develop the company, and later on sell the stocks at a higher price. In that sense Bulgaria and Romania are especially attractive. Serbia is also of interest to SigmaBleyzer but if we have to choose between it and Bulgaria, we'll certainly choose your country. What will be the structure of the new fund and its equity capital? - It will be stuctured similarly to all our current funds in Ukraine. They include limited partnerships and a general partner. General partner means manager that takes the investment decisions. One of SigmaBleyzer's affiliates will be a general partner of the new regional fund. We intend to invest USD100MN that will be raised on two tranches of USD50MN each. I hope that the fund will be operative in the beginning of next year. We plan that the fund will be operating for a period of ten years. We'll make investments in the first six years and we'll be selling equity afterwards. We have not decided yet what the fund's name would be, but its headquarter office will be certainly based in Sofia. One of our vice presidents will arrive here to head its operations. Have you already singled out any Bulgarian companies to invest in?- We are still at quite an early stage of preparations in order to name specific companies in which we intend to invest. And the raising of funds is yet to begin. However, we are ready to consider any investment projects worth from USD1MN up to USD5MN. SigmaBleyzer will focus its investments on hi-tech techologies, software, telecommunications, agriculture related industries such as food and beverage processing. We should not also forget tourism which is a priority branch for the Bulgarian economy.

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