On 28 February, the EBRD held the first capacity building event under its Integrated Approach for the Further Development of the Venture Capital and Private Equity (PE) ecosystem in the Baltic States. The training was held in Tallinn, Estonia at the headquarters of Swedbank and was organised jointly by the EBRD and the Estonian Private Equity and Venture Capital Association (EstVCA), with the participation of PE and VC fund managers and investors across the Baltics.
The training was part of the EBRD’s Integrated Approach for the Further Development of the Venture Capital and Private Equity Ecosystem in the Baltic States that aims to assist the emergence of a sustainable VC and PE sector in the region. The strategy is based on (a) policy dialogue and sector engagements and (b) investments into private equity funds and was approved by the Bank’s Board of Directors in late November 2013.
Policy dialogue and sector engagements are focusing on:
- enhancing availability of market data to enable more effective marketing of investments;
- capacity building for fund managers and local institutional investors;
- regulatory and legislative aspects affecting the VC/PE sector such as local collective investment vehicles laws or procurement procedures;
- improving networks among the Baltic states and beyond in order to realise synergies among market participants; and
- early stage development to facilitate further technology transfer and commercialisation of ideas.
Margus Uudam, Chairman of the EstVCA board, commented: “In the coming years additional financial support for private equity and venture capital will be provided to the Baltic states, but as local market players have limited experience, in addition to providing capital it is also very important to build the capacity of fund managers and institutional investors. One of our top priorities is to develop a new generation of professional fund managers with a strong track record and the ability to raise capital and support companies’ development and growth. We are very grateful that the EBRD is engaging in this activity and bringing its long-time expertise to the region”.
Under the Integrated Approach the EBRD is expected to make investments into a number of VC/PE funds over the next three years. The first was completed on 27 November 2013 with an investment of up to €20 million into BaltCap Private Equity Fund II, L.P. The fund is targeting a size of €100m to make equity and equity-related investments in small and medium-sized enterprises and small mid-cap companies in Estonia, Latvia and Lithuania.
The EBRD has been a major investor in the Baltic States since their independence in 1991. To date, the Bank has invested more than €1.7 billion in about 220 projects in the three countries Estonia, Latvia and Lithuania. The mobilisation and provision of private equity is one of the EBRD’s priorities in the region in order to support the growth and development of local businesses.