SFS new venture capital fund to invest in Greece, Balkans

SFS Group Pcl (SFS), the uniquely diversified conglomerate active in financial services, investments and asset holdings has big plans to set up a new venture capital fund to take advantage of opportunities still available for investments in the south eastern European region.

SFS Group Vice-Chairman and CFO, Philip Larkos, told the Financial Mirror that the group plans to raise EUR 20-30 mln through a new venture capital fund to be set up in 2007, which will be a US-type, private, special-purpose vehicle, with limited transferability of interests and fixed duration, in sharp contrast to a closed-end, evergreen, public VC investment company like CyVenture Capital.

“There are very limited venture capital opportunities left in Cyprus, since the market was devastated beyond repair when too much cash chased few good opportunities in 1999, thus ruining the market,” said Larkos.

He explained that the emphasis will be to invest in VC projects in Greece, the Balkans and also in Israel.

Larkos says despite many mistakes, the of SFS Group’s VC investments have fared well. Out of eight investments made from the end of 1998, seven projects are doing financially well and or breaking even, while the Group managed to exit from one project without incurring any losses.

“Compared to others, we did extremely well, since in all cases we insisted in maintaining tight financial control and a hands-on investment management style,” he said, adding that after the rebound in equity prices in 2005 and 2006, the prospects for venture capital deals for 2007 has improved tremendously.

“People are looking to boost their returns by taking additional risks for better returns, which is why we believe that we are well positioned to tap into this market and launch a new VC fund sometime during 2007,” said Larkos.

A recent decision to sell the consultancy division of SFS Group subsidiary First Elements, while concentrating on the venture capital division, is seen as directly linked to accelerated plans to set up the new fund.