InvestEU: EIF and Sound Asset Management launch new senior private credit fund to support small businesses in the Baltics

• The EIF has signed a €25 million commitment as a cornerstone investor in Sound Senior Private Debt Fund 1.
• The fund will offer customised financing solutions to small businesses and small mid-caps in the Baltics.
• The EIF commitment is backed by InvestEU, an EU programme designed to mobilise at least €372 billion in investments for EU policy priorities by 2027.

The European Investment Fund (EIF) has agreed to commit €25 million as a cornerstone investor in Sound Senior Private Debt Fund 1. The commitment highlights the EIF’s steadfast support for innovative solutions that will facilitate access to financing for SMEs and small mid-caps in the Baltics.

The fund aims to attract a total of €80 million in commitments by the end of 2024. As the first institutional private credit fund in the Baltics, it will be managed by Sound Asset Management, a newly established Lithuanian independent alternative asset management company headquartered in Vilnius.

The EIF’s commitment will be joined by other institutional investors, creating a diversified pool of capital. Given the challenging fundraising environment and the target fund size, the EIF’s commitment will have a strong catalytic effect, improving access to liquidity for SMEs and small mid-caps, which are the backbone of Baltic economies.

The Fund will offer customised financing solutions, primarily in the form of senior loans and unitranche facilities, to small businesses and small mid-caps. This aligns with the priorities of InvestEU, the financing tool designed to mobilise at least €372 billion in additional investment for EU policy priorities in the period between 2021 and 2027. Specifically, the operation will support European competitiveness, foster growth, and promote sustainability and green transformation.

Furthermore, the Fund will be classified as an Article 8 fund under the Sustainable Finance Disclosure Regulation (SFDR), with 15% of its investments dedicated to climate action and environmental sustainability criteria.

EIF Chief Executive Marjut Falkstedt said: “The Sound Senior Private Debt Fund is the first institutional private credit fund targeting small businesses in the Baltics. This initiative is fully aligned with our goal of providing alternative sources of financing for small businesses across Europe, overcoming the reliance on traditional bank lending. It will help Baltic small businesses access tailor-made financing that meets their specific financing needs and supports their growth and development plans.”

CEO of Sound Asset Management Andrius Sokolovskis said: “The fund will provide much needed financing solutions for underserved and growing small businesses as well as small mid-caps in the Baltics. This will be the first senior private debt fund backed by institutional investors in the Baltics. We are grateful for the EIF’s trust in our team and overall support for the development of the private debt class in the region where alternative financing is very much needed.” 

Background information

The European Investment Fund is part of the European Investment Bank Group. Its central mission is to support Europe’s small and medium-sized enterprises (SMEs) by helping them access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments that specifically target this market segment. In this role, the EIF furthers key EU policy objectives such as competitiveness and growth, innovation and digitalisation, social impact, skills and human capital, climate action and environmental sustainability, and more.

The InvestEU programme provides the European Union with crucial long-term financing by mobilising significant public and private funds to support a sustainable recovery. It helps generate additional investments in line with key EU priorities, such as the European Green Deal, the digital transition and support for SMEs. The InvestEU programme brings together a multitude of EU financial tools to support investment by making project financing simpler, more efficient and more flexible. The programme has three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented via various financial partners. They will invest in projects by using the EU budget guarantee of €26.2 billion to mobilise at least €372 billion in additional investments.

Sound Asset Management is a recently established authorised alternative asset management company, led by a team of four founding partners. The company is focusing on development of the private debt asset class in the Baltic States, currently launching its first Senior Private Debt Fund.

Press contacts

EIB Group:
Kristiina Randmaa, tel.: +352 4379 72894 — k.randmaa@eib.org
Follow us on Twitter@eif_eu
Website: www.eif.org — Press Office: +352 4379 21000 — press@eib.org

Sound Asset Management:
Andrius Sokolovskis, tel.: +370 620 25283 — andrius.sokolovskis@soundam.eu