Community Development Venture Capital Alliance

Central & Eastern Europe Growth Fund LLC (Growth Fund)
Main Offices: 1050 17th Street NW, Suite 1150, Washington DC 20036
Website: http://www.seaf.com/growth
Email: robbdoub@seaf.com

Fund Manager: Small Enterprise Assistance Funds (SEAF)

Key Personnel: Sylwia Taras, Director General

Established: 2000

Total Committed Capital: US $16.3 million

Amount Invested: US $9.1 million (56%)

Shareholders:
International Financial Corporation (IFC)
Deutsche Investitions - und Entwicklungsgesellschaft mbH (DEG), Germany
State Secretariat for Economic Affairs of Switzerland (SECO)
Finnish Fund for Industrial Cooperation (FINNFUND), Finland
Evangelische Kirche in Hessen und Nassau (EKHN), Germany
Calvert World Values International Equity Fund (Calvert)
Merifin Capital N.V., Belgium
SEAF Management LLC

Geographic Focus:
The Fund invests in companies in Central and Eastern Europe, primarily in those countries where SEAF already manages funds - Poland, Bulgaria, Russia, Lithuania, Estonia, Latvia, Croatia, Romania, Macedonia, Czech Republic, Hungary, Slovenia, and Slovakia.

Background
The primary aim of the Growth Fund is to make follow-on investments, as business growth financing requirements dictate, in small and medium-sized enterprises (SMEs) already held in the portfolios of other SEAF funds across the Central & Eastern European region. The Fund targets for investment the best performing companies from the portfolio of country funds in Central and Eastern Europe. Up to 15% of the Fund's investments may be in enterprises not currently invested in by a SEAF country fund. The Growth Fund is currently the only fund managed from SEAF's headquarters in Washington DC. Investments are made in combination with a management training and technical assistance component in order to enhance the business performance of the Fund's investments and to help meet its developmental objectives. The Fund actively assists its portfolio companies in implementing appropriate improvements in management techniques and practices, especially relating to financial control, cost accounting, quality control, and marketing. In addition, the Fund Manager's investment officers are actively engaged in implementing business strategy and in following-up with advice rendered by outside experts. Business support programs are sponsored not only by the Fund, but also by other international and local agencies.

Social Mission
By providing affordable financing to private sector SMEs in underserved markets, the Fund seeks to build the capacity of SMEs to expand production, access new technology, improve competitiveness, reach wider markets, increase profits, and achieve long-term commercial sustainability. By supplementing investments with technical assistance, SEAF aims to help develop business and management skills, improve corporate governance and transparency, and formalize legal structures, business structures, and tax reporting. The development of a vibrant and sustainable SME sector will help to generate new employment, export revenues, and government tax revenues; stimulate economic growth; promote free markets; improve social welfare; and contribute to political stability in developing countries. The Fund also seeks to provide examples of successful private enterprises to entrepreneurs and investors, help SMEs establish new customer and banking relationships with the formal banking sector, create a culture of equity investment, institutionalize investment methods and structures, and help to develop the country's overall financial sector.

Investment Information
The Fund invests in enterprises engaged in a broad diversity of sectors, with a special emphasis on companies that are export-oriented and those with strong growth prospects. The Fund will not invest in enterprises engaged in the following activities: banking, insurance, and financial services; speculative investment activities such as real estate or commodities trading; production or sale of tobacco products or hard alcohol; arms manufacturing or other military-related activities; operation of casinos or other gambling-related activities; operation of abortion clinics; or activities harmful to the environment. The Fund also complies with IFC environmental, health, safety, and social policies, such as the following: The Fund will not make investments in entities engaged in forced labor, harmful child labor, trade in certain regulated wildlife products, production of ozone depleting substances or products containing PCBs, drift net fishing, projects affecting indigenous peoples or containing large resettlement components, and projects that pose serious health risks. The Fund adheres to applicable environmental, indigenous people, involuntary resettlement, cultural property protection, occupational health and safety requirements, and child labor and forced labor laws and regulations of the country in which investments are made. The Fund appoints an Environmental Manager, implements an Environmental Management System, and furnishes an Environmental Performance Report. Investments are generally in the range of US $1 million to US $3 million, with a minimum investment of US $500,000 and a maximum investment, including follow-on investments, of US $3,500,000. The Fund invests in companies that have been financed by SEAF and that have grown beyond the financing capacity of the SEAF country funds. Co-investments with SEEF Holdings, Ltd., a wholly-owned subsidiary of Southeast Europe Equity Fund, Ltd.; Steve Jurvetson, a Managing Partner for Draper Fisher Jurvetson; and Ned Oliver, a Managing Partner for Oxford Bioscience.