In an annoucement made yesterday, the European Bank for Reconstruction and Development said it will be investing EUR20 million to BaltCap Private Equity Fund II, L.P. The decision to put capital into the Baltic fund was to benefit the small and medium-sized enterprises and small mid-cap companies in the Lithuania, Latvian and Estonian areas.
The Baltcap fund aims to raise EUR100 million in order to develop firms located in the Baltic region and make them into leaders in their industries locally and beyond. Should the goal be reached, Baltic Business News said in its report that there is possibility for such companies to garner attraction from international investors.
In a signing of the investment agreement at Riga Wednesday, EBRD President Sir Suma Chakrabarti said, "This is a milestone because it demonstrates the importance of providing private equity and venture capital to companies on a long-term basis. The EBRD can play an important role here and we are prepared to do so in order to support the development and growth of innovative local companies with far-reaching potential. We are also pleased to have collaborated on this transaction with the Baltic Innovation Fund, the ‘fund of funds' that was launched by the European Investment Fund (EIF) and the governments of Estonia, Latvia and Lithuania and is managed by the EIF."
The EBRD, cited in the report, was looking to boost the injection and use of venture capital as the European region is experiencing scarcity in long-term financing. Since 1191, the EBTD has been the Baltic states' major investor and had already placed over EUR1.7 billion in the three countries to support around 220 projects.
Baltcap, on the other hand, is EBRD's long-time partner and is an experienced fund manager. Boasting a wide network in the Baltic region, it had invested in over 60 companies since its establishment in 1995 via two venture capital funds and four private equity funds.
Join the Conversation