Polish International Development Fund
We co-finance foreign investments of Polish companies
PFR TFI manages two specialized funds supporting international expansion - the Polish International Development Fund CEF and the Polish International Development Fund 2 CEF. The funds co finance international investments from Polish companies by providing equity and debt funding.
The fund's role is to facilitate the investment expansion of Polish companies into foreign markets. The Fund can share risk with Polish entrepreneurs taking on the challenge of foreign investment and provides equity or debt financing, increasing the strength of Polish companies in the international market.
The implementation of foreign investments opens up a number of opportunities for companies that benefit from financing provided by the Fund. Above all, it is a chance to accelerate development and open the company to international markets through, among other things:
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How does the fund work?
The Polish International Development Fund supports the expansion of Polish companies into foreign markets. Together with Polish companies it co-invests in foreign projects, foreign subsidiaries (greenfield and brownfield projects), offering long-term, stable debt and equity financing.
The fund is always a minority investor, with lower share than the Polish partner. The fund does not interfere in project management as it is the obligation of the partner.
Success in business increasingly depends on an efficient foreign expansion. Through our fund, we facilitate the development of Polish companies on international markets. We finance up to the half of the value of a foreign investment. We are flexible in terms of both scale as well as financing forms.
The activity of the Polish International Development Fund is based on several pillars:
Risk allocation
The Fund bears the risk of the foreign investment in proportion to its equity or debt involvement - it shares the business and credit risks of the foreign expansion with the Polish company. The fund does not expect direct recourse to the balance sheet of the partner in Poland or collateral on Polish assets. The fund is a long-term investor - the investment agreement is usually concluded for a period between 5 and 10 years.
Co-financing conditions
The fund offers financing in two forms: debt - secured by the assets of a foreign project or unsecured, subordinated, converted (mezzanine financing/structured equity) or acquisition of shares with the possibility of their repurchase by the Polish partner at market value or under other predetermined conditions.
Broad spectrum of activities
The fund can be a financial partner in: the acquisition of an existing foreign company, the creation of a new subsidiary and its organic development or the financing of the next stage of expansion.
Financing of diverse projects
A typical investment of the fund is between 5 million and 12.5 million euros. In the case of smaller projects, we adjust the financing conditions to the needs of a particular investment. The fund has virtually no sectoral or geographical restrictions.
Who can benefit from the solutions offered by the fund?
The Fund's offer is aimed at Polish companies that successfully operate in Poland and are considering investments in foreign markets.
The Fund follows Polish companies wherever they see opportunities for business development. We invest in various sectors in both developed and developing countries.
Investments co-financed by the fund may be oriented toward the achievement of various goals:
Investment process
Each investment process is gradual and consists of evaluating the investment project, understanding the operating model, getting to know the Polish company and then obtaining the required corporate approvals and negotiating the investment agreement. At the Polish International Development Fund we approach each investment individually, adjusting the schedule and action plan to the specific project. However, we can usually distinguish several stages of cooperation with a Polish partner.
The first step includes information about the project provided by the Polish company. This is usually done during a meeting, by phone or e-mail. At this stage, we conclude a non-disclosure agreement and discuss the preliminary concept of the investment project with the interested party.
Once we have obtained the necessary information, we are ready to start the project evaluation phase, which usually takes between 1 and 2 months. Project evaluation takes place in two stages. First, we evaluate the experience and competencies of the potential partner, examine the company’s financial statements, ownership structure and analyse the concept and scope of the planned investment. All of this is done in order to estimate its business opportunities. After initial approval by the investment committee, further documents are prepared, including a full business plan, market analyses and financial projections. At this stage we also verify the investment’s compliance with the fund’s social responsibility policy.
When we reach an agreement with the partner on the basic assumptions of the project, we begin to prepare an investment agreement.
The last stage involves operational cooperation during project implementation. The investment horizon usually lasts from 5 to 10 years. During this time, the fund supports the Polish partner by serving on the supervisory board of the foreign company and monitors the implementation of the investment assumptions. The fund finishes its participation in the project under the conditions of the investment agreement, by the repurchase of shares by the Polish partner or redemption of shares in the foreign company. There is also a possibility of granting additional financing in case of a desire to further develop the investment. The length of the investment process depends on factors such as the complexity of the investment, advancement of the project and negotiations with partners.
Investing responsibly
Intensive international cooperation allows us to consolidate our corporate social responsibility standards.
In its investment activities, the Polish International Development Fund takes into account the principles of sustainable development in three main areas: environmental, social and corporate governance.
The social responsibility policy of the Polish International Development Fund is based on the principles of sustainable development as defined by the United Nations in The 10 Principles of the UN Global Compact.
When embarking on a new investment project, the fund always works with its Polish partner to identify and characterise socially sensitive areas and define key stakeholder groups. A corporate social responsibility strategy is implemented and developed for each project company.
The fund’s social responsibility policy is in line with PFR TFI’s strategy of incorporating risks for sustainable development into its operations when making investment decisions. For more information on PFR TFI’s involvement in sustainable development, please see the Sustainable investing tab.
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Team
People are the basis for the success of every project. The Polish International Development Fund team consists of experts in the field of foreign investment with many years of experience in the process of international equity and debt transactions. Its members have extensive knowledge and experience in working in various sectors of the economy, so they are prepared to lead a variety of investment projects. Moreover, they are driven by energy, passion and commitment in their work.
