EUR 100 million Baltic Innovation Fund is launched to benefit SMEs
The Baltic Innovation Fund will invest EUR 100 million into private equity and venture capital funds focussed on the Baltic States over the next four years through a ‘fund of funds’ process to further developing equity investment into Small and Medium sized enterprises (SMEs) to boost growth.
The Baltic Innovation Fund management agreement was signed in Vilnius on 26.09 by the EIF and representatives from three Baltic States. The EIF is investing EUR 40 million alongside investments of EUR 20 million each from the national agencies – INVEGA in Lithuania, the Latvian Guarantee Agency (LGA) in Latvia and KredEx in Estonia.
European Investment Fund, Chief Executive, Richard Pelly stated, “This initiative is a result of close co-operation between the EIF and the three Member States from the Baltic region to create a long-term investment scheme that will attract additional private finance and implement the best market standards for equity investing in businesses. EIF is proud to have led this process and looks forward to the implementation of investments beginning in 2013”.
Rimantas Žylius, Lithuanian Minister of Economy, stated “Lithuania welcomes this long-term partnership between EIF and the three Baltic States which is the first initiative of such kind. The Baltic Innovation Fund will increase the accessibility of private equity and venture capital for SMEs with high growth potential and operating in a Baltic region. The creation of ‘fund of funds’ will contribute towards further regional private equity and venture capital market development, will strengthen the partnership and cooperation between the Baltic States and EIF. This initiative will have a positive impact not only for further development of Lithuanian venture capital ecosystem, but certainly will stimulate the growth of employment and economic competitiveness of the Baltic States“.
Klavs Vasks, Chairman of the Board, Latvian Guarantee Agency, stated “This initiative should over next few years result in the financing of more than 50 growth-focussed enterprises, that will often either already be pan-Baltic or will use the investment capital to become pan-Baltic. The four investing parties are also adopting this pan-Baltic approach in creating this fine example of fruitful cooperation between the Baltic States and EIF.
According to Andrus Treier, Chief Executive Officer of KredEx, the new fund is a financing solution that has been missing from the Baltic market. “BIF is an excellent illustration of the three Baltic States acting together, enabling to make small capital markets together more attractive for investors and creating further financing possibilities for enterprises. Close cooperation with EIF as an experienced and well known investor ensures that the best market standards are followed giving additional assurance to possible private and institutional investors. Without such cooperation it would be very hard to attract Venture Capital investments in comparable size.”
The investment process for the Baltic Innovation Fund will begin in 2013 when EIF will start to process transactions with selected Fund Managers. Each Fund manager will be expected to attract an additional and equivalent amount of private finance from pension funds and private investors which will double the amount of investment capital within the programme. Across a 4 year investment period, between 3 to 6 Fund Managers will receive investment commitments which will then be invested into innovative high-growth SMEs.
Importantly, the Baltic Innovation Fund is the result of strong co-operation between the three Baltic States and the EIF that is unique in its nature across Europe and places the region in a position to benefit from greater levels of private investment than before. Furthermore, the three governments are taking a lead in this process by investing into the Baltic Innovation Fund through their respective national agencies and utilising the revolved Structural Funds from previously successful SME support schemes to do so. This unique trans-national process provides a real opportunity to further develop the Baltic PE & VC market.
EIF: David Yormesor, tel : +352 42 66 88 346 , e-mail : firstname.lastname@example.org
KredEx: Tarmo Seliste, tel +372 667 41 16, e-mail: email@example.com
LGA: Krisjanis Zarins, tel: +371 673 593 87, e-mail : firstname.lastname@example.org
INVEGA: Inga Beiliūnienė, tel. +370 5 211 3566, e-mail: email@example.com