ILTE: Co-investments into private credit funds

The European Investment Fund (EIF) has joined forces with Lithuanian national development institution UAB ILTE to provide as much as €191.6 million for non-bank credit providers to invest in companies in the country. The funding for these credit providers – also known as private credit funds – involves ILTE support of €95.8 million that is being matched by the EIF.

The initiative is aimed at accelerating the development of capital markets in Lithuania and builds on previous ILTE cooperation with the EIF.  The goal of the new initiative is joint investments in private credit funds, generating much-needed financing for Lithuanian companies. The planned investments will help foster a senior private credit market in Lithuania as an alternative source of financing for companies, diversifying their financing options.

Over the next three years ILTE will invest into private credit funds focused on the Lithuanian companies to further facilitate access to finance especially for Small and Medium sized enterprises (SMEs).

ILTE will openly consider the investment opportunities that meet the following requirements:

• The investment strategy should focus on senior debt ;
• the total amount invested by the Portfolio Funds in enterprises established and (or) operating in Lithuania at the time of first investment be at least 2 times the amount drawn down for the purpose of investments from ILTE;
• the total amount invested by the Portfolio Funds in SMEs be at least 2 times the amount drawn down for the purpose of investments from the ILTE;

The funds need to satisfy a strict set of investment criteria applied under EIF’s normal investment process.

We are looking for qualified and credible partners. You can consider to apply for EIF and ILTE investments if you fulfil, amongst others, the following criteria:

• Your investment strategy is focused on senior debt to be provided to SMEs and Small Mid Caps.

Please outline and explain how the proposal fits in the current competitive landscape, and how the know-how of the team matches the Fund’s investment strategy;

• Your team is well-balanced, with team members complementing each other in terms of skills and experience, with a proven ability to work together.

• Your track record proves adequate experience in the targeted investment area; previous investment successes and failures will be carefully analysed in order to understand the investment capabilities of the team;

• The fund is capable to attract further private finance from other investors, e.g. pension funds, insurance companies, other fund-of-funds, which will at account for 30% of total commitments;

• The fund size is commercially viable to ensure the team’s stability and the fund’s investment capacity;

• The legal and tax structure of the fund should be clear and transparent according to the market standard terms and conditions;

• All stakeholders in a fund have aligned interests.

In addition, if you are interested to learn more about the private credit, you can find the information about the Senior Private Credit window of the InvestEU mandate:

• EIF Equity Products (among which investments in debt funds): Equity products (eif.org)

• Information on Senior Private Credit: Equity - EIF InvestEU  & PowerPoint Presentation (foleon.com)

• Senior Private Credit term sheet (which goes quite into the details and provides our definition of Senior Debt): annex-v-senior-private-credit-termsheet.pdf (eif.org)