MFB Invest, the venture capital company of the Hungarian Development Bank (MFB), plans to inject HUF 5 billion in SMEs in the second half of the year, MFB Invest CEO Sándor Ormándi said at a press conference on Thursday.
The injections follow a period of moderate investment, Ormándi said.
MFB Invest injected about HUF 300 million in Galvánplasztik, based in Székesfehérvar (NW Hungary), and the company added 31 jobs as a result. MFB Invest now holds a 44% stake in the company.
MFB Invest aims to get a 10-20% average return on its investments, Ormándi said.
MFB Invest expects to take decision on three projects in the near future. Two of the prospective investments are in Borsod-Abaúj-Zemplén County and could create 100-150 jobs. The EBRD is participating in one of them which involves generating energy from waste. The other prospective investment is based on a patent and involves building a factory for deliveries to the automotive industry. The third possible investment also involves a Hungarian patent for an invention that can reduce vehicles' oil use by 15-20% and noise levels by 15%, while raising efficiency by 13-15%.
MFB Invest acquires stakes of between 26% and 49% in the companies into which it injects cash. It pulls out of the companies within five years. Among its investment targets are companies in the life sciences and health, IT, consumer goods, food, industrial, automotive, energy and environmental protection sectors.
MFB Invest exits its investments through the purchase of its shares by co-owners or through the sale of the shares on the stock exchange.
MFB Invest does not invest in property, as its existing HUF 800 million property portfolio is already problematic.
MFB Invest plans to establish funds or venture capital companies in which private investors or big companies such as Magyar Telekom or oil and gas company MOL could participate, thereby strengthening their circle of suppliers.