“The East West Venture Capital Fund, which will be investing in Hungary and Portugal as a private equity fund operating according to market regulations, will begin operations on Wednesday and is opening a new era in economic relations between the two countries. The Fund’s investors include Eximbank Cls, OTP Bank Plc and MOL Plc.”, Minister of Foreign Affairs and Trade Péter Szijjártó announced.

During the next eight years, the Fund, which has a planned capital of 20 million euros, will be investing in Hungarian and Portuguese small and medium-sized enterprises with the growth potential to assist the digital transformation of both the private and public sectors through their solutions and developments.

Fund management tasks will be performed by Alpac Capital, which is registered and regulated by the Portuguese financial supervisory authority and has offices in Budapest and Lisbon.

In his speech, Mr. Szijjártó stressed that a huge global competition has developed with relation to where the developments necessary to achieve a successful digital switchover and the investment projects based on them will be realised and who will be in possession of the new solutions that will enable the success of the transition to the new global economy. “Creativity, the diligence of the Hungarian people, innovative thinning and mathematics knowledge all represent a competitive advantage for Hungary in this competition”, he highlighted.

“The East West Venture Capital Fund Hungarian-Portuguese venture capital fund plays an important role in this situation, thanks to which innovative small and medium-sized Hungarians enterprises (SMEs) will have access another wide range of international development resources in the interests of supporting their competitiveness. This means the competitiveness of the SME sector will be receiving additional support”, Mr. Szijjártó said.

“This investment fund is unique because instead of a passive investment policy it will be practicing an active investment policy, meaning that after providing funding the Fund will take part in the management structure of the given enterprise and help it to operate successfully”, the Minister explained. “Investments will primarily be made within the areas of IT and smart industry, and will serve to support the Industry 4.0 programme”, he said.

The Minister explained that one of the most important conditions with relation to the Hungarian national economy is that 40 percent of the capital generated by the fund must be invested in Hungary.

He also reported on the fact that there is a change in dimension ongoing within the Hungarian economy, the internal reason for which is that the Hungarian economy has to all intents and purposes achieved full employment, while the external reason is digitalisation, which is sweeping through the global economy, and within it through traditional sectors of industry, several of which provide the backbone of the Hungarian economy.

Low unemployment represents a “good challenge” that must be handled, and the focus of investment promotion and economic strategy must be moved from quantity to quality, he emphasised.

In its statement issues with relation to the establishment of the capital fund, Eximbank highlighted: The Fund will contribute to tightening relations between the two countries via the participating enterprises. Hungarian SMEs can use Portugal’s access to Iberian, African and South American markets to their advantage, while Portuguese enterprises will be able to build on Hungary’s Central and Eastern European, Baltic and Central Asian relations.

MOL’s Director of Group-level Strategy and Business Development György Bacsa highlighted the fact that the Alpac structure provides a unique opportunity for Hungarian and regional companies to reinforce their international presence.

Deputy CEO of OTP László Wolf told reporters that through it sufficient level of financing resources, high level of professional competence and system of business relations, the Fund will be capable of assisting the development of new small and medium-sized enterprises.

(Cabinet Office of the Prime Minister/MTI)