Just two days after retiring as chairman and chief executive officer of Alliance Capital Management Corp. in New York, Dave H. Williams bought a fund company that invests in Eastern European companies, and he intends to run it himself.

He and his wife, Dr. Reba White Williams, a former director at Alliance Capital, bought East Fund Management GmbH, a London-based private equity manager, on Thursday for an undisclosed price from Bank Austria and Alliance Capital.

The company manages $180 million of assets in five specialist funds, which invest in untraded securities. Four of the funds are single-country portfolios that invest in a diversified roster of companies in Romania, Slovakia, Austria, and the Czech Republic. The fifth invests in companies throughout Western Europe. The funds are marketed to European institutional investors.

Mr. Williams, 68, said Alliance Capital and Bank Austria had been looking to sell the company in order to focus on their core businesses, and he could not pass up the opportunity to enter the emerging market of Eastern Europe, he said.

"As smaller former Communist countries join the European Union, there is a run-up for their businesses, and their companies could significantly increase in value," Mr. Williams said.

After Portugal entered the EU 10 years ago, the market values of its companies rose by as much as 500% within a year, he said. "With economic reform and improved accounting and funding, the economy" in those countries improves. "When they enter the EU, successful companies and successful economy become an ordinary place for investors."

Mr. Williams said he plans to start a specialist fund to invest in untraded securities in all four of the countries where the current single-country funds now invest. He also intends to continue distributing the funds to institutional investors in Europe, but down the road, he said, he wants to sell them to high-net-worth people in both Europe and the United States. He also plans to open a New York office.

Geoffrey Bobroff, a consultant in Providence, R.I., said he doubts that investment in Eastern Europe could pay off any time soon. In the past five years many companies have tried to establish a foothold in Eastern Europe but have had trouble finding profits, he said.

A lot of things have to go right before a firm like East Fund starts making money, Mr. Bobroff said.

"You really need to go in with a long-term view," he said. "If you believe the country in which you are establishing yourself will have pension law reform, then owning an asset management company in that part of the world can have its benefits. But it is still very premature."

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