The biggest private equity and venture capital investor in the Baltic states BaltCap launches a new EUR 50 million investment fund BaltCap Growth Fund. The fund will make investments in fast-growing small and medium-sized enterprises (SMEs) in the Baltic States.
“The fund was established because we saw the need to invest in fast-growing companies in Lithuania and the other Baltic States” at the press conference said Kornelijus Čelutka, Investment director at BaltCap.
According to him, the fund is meant for profitable businesses that want to expand their operations, purchase and takeover deals and launch new products and services. This is why the representatives regularly engage in a dialogue with specific enterprises where they intend to invest. It is planned that EUR 3-4 million will be invested in one company.
On Thursday, BaltCap, which will invest EUR 2 million, signed an investment contract with Baltic Innovation Fund, which will invest EUR 20 million, as well as Swedbank Investment Management and DNB Asset Management that will invest respectively EUR 14 million and EUR 4,5 million. Additional EUR 10 million are expected to be attracted when the fund becomes operational.
The new fund will be created in cooperation with the European Investment Fund (will invest EUR 8 million), as well as INVEGA (Lithuania), Kredex (Estonia) and Altum (Latvia) all of which are expected to invest EUR 4 million.
Tadas Gudaitis, CEO at Swedbank Investment Management Lithuania, stated at the press conference that investments are based on the expectation to retain SMEs competitive ability and increase productivity.
“We believe that small and medium-sized enterprises have potential to grow and see a positive macroeconomic fundamental for that. We believe that fund will produce a good return” said Tadas Gudaitis.
CEO of DNB Asset Management Šarūnas Ruzgys has also assured that these kinds of funds promise a higher return, therefore, they are very attractive for investors.
“On average, the market growth rate is estimated to be 5-7 percent. These kinds of funds generate higher returns, but as well, a certain percentage of the risk should be held”, at the press conference said Šarūnas Ruzgys.
According to Deputy Chief Executive of EIF Roger Havenith, the fund will contribute to economic growth and job creation in the Baltic States. With regard to the importance of investment fund, he noted that equity capital investments in the private sector in the region is still far below the EU average.
“Therefore, in our opinion, Baltic States have significant potential in that area,” he said.
The first BaltCap investment fund for SMEs was established in 2001. Later, in 2010 and 2011, two Jeremie funds were established in Lithuania and Latvia.
Prepared in accordance to BNS information.