€ 165 Million New State Financed Capital Program for Hungarian Businesses

New Horizons for Hungarian Businesses in the M&A market: €165 Million State Financed Capital Program to Boost International Expansion

The Hungarian economy is embracing a significant opportunity for growth with the launch of a substantial state financed capital program worth HUF 60 billion (€165 million), aimed at facilitating the international expansion of domestic enterprises. Announced by the National Capital Holding, the state financed capital program, called Outward Investment Private Equity Fund is designed to support cross-border investments, acquisitions, and the establishment of international subsidiaries. This initiative is set to accelerate the competitiveness of Hungarian firms on the global stage.

Driving International Growth

Hungary is one of the most open economies in the world, with over 16,000 export-ready small and medium-sized enterprises (SMEs) contributing to a GDP export rate exceeding 60%. Despite this, the international expansion or “outward investment” of Hungarian companies remains a capital-intensive challenge, particularly for larger market players looking to penetrate foreign markets. The newly introduced fund from the National Capital Holding aims to address this gap by offering targeted financial support to Hungarian-owned businesses, enabling them to venture beyond national borders.

As highlighted by Bence Gerlaki, Deputy State Secretary for Economic Development and Outward Investment, this program is a vital tool for sustaining economic growth and enhancing the competitiveness of Hungarian companies. By fostering the creation of international subsidiaries and acquisitions abroad, Hungarian businesses will be better positioned to grow their market presence, improve innovation capabilities, and strengthen research and development activities. These investments of state financed capital program will help to build a new generation of “national champions” that can thrive on the global stage.

Strategic Investment Focus

The HUF 60 billion fund is managed by Focus Ventures Zrt., a subsidiary of the National Capital Holding that specializes in capital investments for large corporations. The fund will primarily target Europe, with a special emphasis on Western and Central-Eastern Europe, as well as Asia, focusing particularly on the Central Asian region. While sector-agnostic, the fund will prioritize industries identified in Hungary’s Competitiveness Strategy, including agribusiness, logistics, renewable energy, light industry, information and communications technology (ICT), raw materials, and healthcare.

Each investment opportunity will be evaluated on a case-by-case basis, with investment sizes ranging from $1 million to $25 million. To encourage collaboration, each project will require at least 30% co-investment from the Hungarian companies involved, ensuring a shared commitment to the success of the venture. Furthermore, the fund operates on a risk-sharing model, expecting an industry-standard minimum return from each investment.

Unlocking New Markets and Opportunities

The state financed capital program is not only a financial tool but also the first step of a strategic initiative to open new doors for Hungarian businesses. By supporting investments in foreign markets, it allows companies to leverage their existing knowledge and technology, thus improving productivity and gaining access to new markets that would otherwise be difficult to penetrate. “We are actively seeking potential investment opportunities and processing applications as quickly as possible,” said Bence Katona, CEO of the National Capital Holding (which runs the state financed capital program). He emphasized the importance of speed and precision in identifying promising projects and helping Hungarian firms succeed in international markets.

As Hungary continues its journey toward sustainable and dynamic growth, this state financed capital program marks a pivotal step in reinforcing its role as a competitive player in the global economy. Through strategic outward investment, Hungarian companies have the opportunity to strengthen their global presence, enhance innovation, and contribute to the country’s long-term economic success.

With these targeted resources, Hungary is positioning itself to cultivate a stronger global footprint, building a new era of outward investment that promises to shape the future of its economy for years to come.

For those interested in exploring this opportunity or seeking further information, please contact us to learn how we can assist your business in expanding globally.

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