BaltCap signs an agreement with European Investment Fund to create EUR 20 million risk capital fund for Lithuanian SMEs

BaltCap has successfully attracted private fundraising for the first ever risk capital fund to invest into Lithuanian SMEs. This forms part of the EIF managed JEREMIE Holding Fund initiative in Lithuania.

This risk capital fund is a key part of the Holding Fund’s activity and will result in EUR 20 million being invested into Lithuanian micro, small and medium enterprises. The Fund will focus on expansion financing of SMEs with established operations and growth potential taking equity stakes of up to EUR 3 million with the aim to build a diversified portfolio of 7-15 investments selected by the professional and committed management team of BaltCap.

The EUR 20 million Fund consists of EUR 14 million provided by the EIF managed JEREMIE Holding Fund and EUR 6 million raised from leading institutional investors, including SEB Venture Capital, LHV Asset Management, Swedbank Asset Management and DnB NORD Asset Management.

Richard Pelly, Chief Executive of the European Investment Fund stated, "This is the first ever risk capital fund in Lithuania established with the participation of EU Structural Funds and as a result of support from the Ministry of Economy. This initiative will finance high potential Lithuanian SMEs in a new way, providing an added value both by strengthening their capital bases but also developing a new generation of entrepreneurial leaders in the market.”

According to the Minister of Economy Dainius Kreivys, this is the first time when state resources are used to promote risk capital investments into companies, and this should stimulate risk capital market in Lithuania. Moreover, it is an important financial instrument for innovative high growth potential companies.

“We are very enthusiastic about the development opportunities which Lithuania SME Fund shall provide to Lithuanian businesses that are working hard to grow after economic downturn. Moreover, active participation of solid private investors in this unique public and private partnership is testament to the commercial credibility of the instrument as well as a strong signal that private investors start actively investing in Lithuania again.” – said Simonas Gustainis, Partner of BaltCap.

About JEREMIE
JEREMIE (Joint European Resources for Micro to Medium Enterprises) is a joint initiative launched by the European Commission (DG Regional Policy) and the European Investment Bank group to improve access to finance for SMEs in the EU within the Structural Funds framework for the period 2007 - 2013. JEREMIE enables the EU Member States and Regions to put money from the structural funds and also national resources into holding funds that can finance SMEs in a flexible and innovative way. Since the products will be provided on a repayment basis, funding will be reinvested and hence more SMEs will benefit from the EU resources.

EIF has currently signed 8 National (Greece, Romania, Slovakia, Latvia, Lithuania, Cyprus, Bulgaria and Malta) and 3 Regional (in France - Languedoc Roussillon, Italy – Campania and Sicily) Holding Fund agreements.
The new initiative aims at developing and fostering the role of entrepreneurship within the EU in order to meet the objectives of the Lisbon agenda and help structural funds to deliver greater benefits to the market.
In Lithuania, JEREMIE Holding Fund is financed from the EU Structural Funds under 2007-2013 Economic Growth Operational Programme of Lithuania and managed by the EIF.

About EIF
EIF's central mission is to support Europe's small and medium-sized businesses (SMEs) by helping them to access finance.  EIF designs and develops venture capital and guarantees instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. The EIF total net commitments to private equity funds amounted to over EUR 3.7bn at end 2009. With investments in over 300 funds, the EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. The EIF commitment in guarantees totaled over EUR 13.6bn in over 160 operations, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.
About BaltCap

BaltCap has significant previous experience in this area targeting SMEs with high growth potential in the Baltic States. The firm has strong presence in all three Baltic countries with local offices and experienced team.
Since 1995 BaltCap has advised 6 private equity funds with total size of over EUR 130 million, and has invested in 39 companies as well as completed 24 exits. BaltCap Private Equity Fund established in 2007 with total capital of EUR 63 million is actively investing in buyouts and later stage expansion cases on a pan-Baltic level.

Additionally, BaltCap is raising BaltCap Latvia Venture Capital Fund, which will target SMEs in Latvia under the JEREMIE initiative with a target size of EUR 30 million (the first closing completed in January 2010 at EUR 22 million).

Statistics from BaltCap`s fund specifically targeted at SMEs, Baltic SME Fund, show that since BaltCap investment, the aggregate sales of Baltic SME portfolio companies have grown 275% and the number of employees has grown 23%. BaltCap’s  Lithuanian team has experience in private equity financing including investments in UAB Daily Service, AB Panevėžio Statybos Trestas, SIA Contact Holding and others.

For additional information, please contact:

• EIF: David Yormesor, Communication officer, tel +352 426 688 346, e-mail: inforbd@eif.org
• BaltCap: Simonas Gustainis, Partner, tel. +370 687 59333, e-mail simonas.gustainis@baltcap.com or Silvestras Tamutis, Investment Manager, tel. +370 687 89366, e-mail: silvestras.tamutis@baltcap.com - www.baltcap.com