EBRD boosts private equity in the Baltic states

By Axel  Reiserer

The EBRD is providing an investment of up to €20 million to BaltCap Private Equity Fund II, L.P. for equity and equity-related investments in small and medium-sized enterprises and small mid-cap companies in the Baltic states of Estonia, Latvia and Lithuania. The fund has a target size of €100 million and aims to develop Baltic companies into leaders in and beyond their region that can attract international investors.

Boosting the provision and use of venture capital and private equity is one of the EBRD’s main priorities in the Baltic states, especially at a time when other sources of long-term finance remain scarce. It is particularly important to make equity financing available to smaller companies; extending this outreach is part of the EBRD’s new Integrated Approach for the further development of the venture capital and private equity ecosystem in the Baltic states.

The EBRD aims to assist in the emergence of a sustainable venture capital and private equity sector in the Baltic region via policy dialogue and sector engagements underpinned by investments in venture capital and private equity funds.

BaltCap is a long-term partner of the EBRD and an experienced fund manager with a wide network in the region. Since it was established in 1995, BaltCap has invested in more than 60 companies in the Baltic states across four private equity and two venture capital funds.

EBRD President Sir Suma Chakrabarti said at the signing in Riga on Wednesday: “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 has been a major investor in the Baltic states since 1991. To date the Bank has invested more than €1.7 billion in about 220 projects in the three countries. The mobilisation and provision of private equity is one of the EBRD’s priorities in the region in order to support the growth of companies and the entrepreneurial spirit of Baltic businesses.