As the global financial crisis engulfed Europe in early 2009, Polish private equity veterans Ryszard Wojtkowski, Aleksander Kacprzyk and Piotr Nocen were gasping from some seemingly bad choices of their own. In 2007, they had left top positions in established Central European private equity firms to join the Carlyle Group. The private equity giant had dangled a new Eastern European fund, with a €500 million ($617 million) target and the promise of an uncharacteristic -- for Carlyle, at least -- midmarket focus. Now, Carlyle was retrenching to more familiar territory. The three could either advise Carlyle's Western European, large-cap operation or fundraise for themselves in one of the most difficult environments imaginable.

They opted to go out on their own. "We very much believed in our midcap, co-financing model in Eastern Europe, and we decided to give it a try at the worst possible moment," recalls Wojtkowski in a telephone conversation from his office in Warsaw.

Three years later, the firm they created, Resource Partners, boasts an aggressive record of acquisitions in Poland, with six companies and three bolt-ons, as well as one acquisition in Latvia. Equally impressive, the Polish firm late last year pretty much doubled its initial €155 million fund to a total of €293.4 million through a large topping up by its four limited partners. Resource Partners is beginning to invest that second round.

In retrospect, the timing of the firm's initial push may actually have been providential. "We were helped by some of the macro factors" that distinguished Poland, Kacprzyk says on the same call. That included a greater willingness by Polish entrepreneurs to entertain private equity because of a lack of funding alternatives, as well as Poland's standout economic performance in a battered Europe.

On one level, Resource Partners serves to illustrate why certain emerging markets such as Poland remain so attractive to both private equity and its investors. It certainly underscores the strength of middle-market companies in these economies and their prospects for growth.

But gone are the days when private equity managers could put up a fund and expect limited partners to come running, no matter how attractive the market may be. The story of the Polish firm is also indicative of how imaginative, targeted fundraising by the right team can work, even when money is extremely tough to come by.

"There's been a seismic shift to how fund managers need to approach their investors," says Anne Hutton, principal banker in the equity funds team at the European Bank for Reconstruction and Development, one of two original investors in Resource Partners. The EBRD has invested a total of €40 million. Hutton describes this new association as one of transparency, relationship building and accessibility. Resource Partners "epitomized that shift," she says.

Hutton pinpoints another advantage the three Resource Partners principals had at the time. Because Wojtkowski, Kacprzyk and Nocen came from senior posts at established private equity firms, "they had a track record of successful exits." However, she continues, unlike some other funds operating at the time, "they didn't have a damaged portfolio to look after."

Not that fundraising was a stroll in Warsaw's "azienki Park. "It was incredibly difficult for everybody," Hutton says. "These guys had an experienced team, but no [financial] support."

In fact, initial efforts resembled a bridge fund, with the EBRD and Dutch Rabobank Group as anchor investors, each initially contributing €25 million. "We wanted to give them an opportunity to build their own track record, and [a traditional private equity fund] would follow," says Hutton.

The participation of Rabobank, a global food and agricultural financing powerhouse, is noteworthy. Rabobank already had a commercial bank in Poland and, says Kacprzyk, had designs as well on its own private equity operation. However, Resource Partners successfully convinced Rabobank that post-crisis it made more sense to fund the Polish firm rather than set up a dedicated private equity operation.

In 2010, AXA Private Equity and the European Investment Bank joined as LPs. Again, in more freewheeling times, AXA may well have tackled the market on its own. In a press release in May 2010, AXA trumpeted its initial €50 million commitment to Resource Partners as one that provided the Paris-based firm immediate expertise, a ready-made office and what it called "privileged access" to the Polish and Baltics market. It was the first such arrangement for AXA PE, which Dominique Gaillard, who heads direct funds at the French company, calls "a blueprint for future projects in Central and Eastern Europe."

While raising capital was a long slog, equity investments came rapidly, although, as Wojtkowski is quick to point out, "we were putting together this fund for two years, and we were using this time to cultivate contacts."

In some heady days in 2010, Resource Partners had three transactions in progress simultaneously. To date, the firm has acquired only one investment by means of an auction. All others were proprietary.

According to Kacprzyk, Resource Partners focuses on companies that are profitable, with minimum Ebitda of €2.5 million. Target revenues range from €20 million to €250 million, with trading companies on the higher side of that spectrum. The firm won't make hostile bids.

The median investment is about €15 million. The biggest investment to date totals €40 million. That bought the firm a 95% stake in Polish cosmetics retailer and distributor Interchem SA, which last year acquired another personal-care retailer, Polbita Sp. z o.o. Resource Partners financed that add-on as well.

Resource Partners will typically lever its equity with about 3 to 4 times Ebitda worth of senior debt, according to Wojtkowski. "The beauty of this lower midcap segment is that the decision [to lend] is being done by local banks, and they are much more aggressive and more active" than global banks, he says. The firm avoids mezzanine debt.

Resource Partners has acquired both majority and sizable minority stakes. The firm prefers that the owner-entrepreneur retain an equity stake and continue to manage. "We don't aspire to be operational," says Kacprzyk, although he adds that it's typical to install a new CFO or comptroller. "A very large part of our decision is a good management team."

Acquisitions so far lean heavily toward consumer-related enterprises, with a special emphasis on food.

Wojtkowski believes the Polish business landscape offers an advantageous combination of "consolidation and expansion," especially in sectors that benefit from the country's growing consumer class. He describes a marketplace that remains highly fragmented. "In other countries in Europe, they may have two or three major players," he says. "We have 15."

At the same time, the fund targets companies with growth opportunities that necessitate additional capital. Wojtkowski cites the fund's minority investment in food processor Melvit SA. The money underwrote a new production facility that will triple capacity.

Under the fund's mandate, 60% must be invested in Poland, with the remaining 40% open for investments in other Central European countries that are members of the European Union. The partners see Romania as another market with great potential. They have planted a team, including another Carlyle alumnus, on the ground there working on potential deals.

According to Resource Partners' principals, it's too early to discuss selling portfolio companies, although there have been some approaches. "The portfolio is only 18 months old, and we didn't invest in quick flips," says Kacprzyk. The firm will wait another year or two for growth plans to kick in, he says, and "additional Ebitda to materialize."

So saying, the firm is confident there will be willing buyers out there. The partners point to potential strategic acquirers, especially companies in European countries such as Spain and Italy that are looking for geographic expansion and a foothold in Poland.

With some exits will come the possibility of another fund, although Kacprzyk and Wojtkowski are quick to point out that may be two or three years away. While they believe a new fund shouldn't be substantially larger than what they have now, they would like to diversify their investor base, adding several more LPs while retaining their core.

They know they will likely face growing competition as well for funds. Poland, along with Turkey, tops many institutional investors' list as the most promising of emerging European nations.

Resource Partners wants its story validated through exits, although the partners believe that some potential investors are already sitting up and taking notice. It's a sea change from three years back when the partners were the grand contrarians. "In 2009, when everybody was telling us to forget about fundraising, we said, 'This is the moment to do something,' " says Kacprzyk.