Discover the advantages of a relationship bank providing leverage on both fund and portfolio level, optimizing your investments for maximum returns. Read more in our latest article, where @Petr Polach, Co-Head of Group Structured Finance & Investment Banking at Raiffeisen Bank International AG dives deeper into the strategies and benefits of leverage in private equity.

Getting and optimizing leverage in private equity
Private equity in the Central and Eastern European (CEE) region presents unique challenges and opportunities. However, currently deal flow for alternative investment funds remains challenging due to different pricing expectations between buyers and sellers as well as geopolitical factors which also play a significant role. “In such an environment, optimizing leverage becomes crucial for private equity players and that’s where we as a bank being present in 12 CEE markets can step in,” says Petr Polach, Co-Head of Group Structured Finance & Investment Banking at Raiffeisen Bank International AG.

Navigating Fund Level Leverage
At the fund level, alternative investment funds in CEE face “traditionally” fundraising challenges since e.g. US investors expect a higher return on their investment compared to developed markets. To counter this, Net Asset Value (NAV) facilities emerge as an intriguing option. Although common in Western countries, they are not widely utilized in CEE. Recognizing this gap, Raiffeisen Bank International offers tailored support for CEE markets, providing NAV financing ranging from EUR 10 million to EUR 75 million, catering to the smaller fund volumes typical for CEE countries and aligning with the region’s dynamics.
Despite challenges when it comes to securities for NAV facilities such as lower asset diversification and granularity compared to Western European funds, NAV facilities offer several advantages for the fund itself. They enhance Internal Rate of Return, provide funding certainty in competitive situations, or cater for additional investments.

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