After closing private fund raising, BaltCap Management Latvia has signed an agreement with the European Investment Fund on the establishment of a €30m venture capital fund under the JEREMIE initiative.
The fund will provide start-up and expansion financing to companies with established operations and growth potential taking equity stakes between €0.3-3m with the aim to build a diversified portfolio of 15-20 investments.
The fund will consist of €20m provided by EIF managed JEREMIE Holding Fund and €10m raised from local private investors, including Parex Asset Management, Hipo Fondi, LKB Krajfondi, Pirmais Slegtais Pensiju Fonds and high net worth individuals.
This is the first completed operation and other agreements are expected to be signed with selected financial intermediaries under EIF’s managed Latvian JEREMIE holding fund of €91.5m.
The total amount of funds, including attracted private co-financing, available to Small and Medium Sized Enterprises (SMEs) via equity investments and loans is estimated to reach €154m after all signatures are completed.
Apart from Baltcap, other financial intermediaries have been selected by EIF in Latvia to manage the full allocation of JEREMIE funds and include:
– Imprimatur Capital Baltics has been selected to manage seed and start-up capital funds with a total capital of €20.4m;
– SEB banka has been chosen to manage a FRS instrument with total available funds of €60m;
– Swedbank will manage an FRS instrument with total available funds of €44m.
All the above mentioned transactions, are currently under negotiation with legal structuring and fundraising in process and signed contracts are expected to follow during the first quarter 2010.
JEREMIE (Joint European Resources for Micro to Medium Enterprises), an initiative launched by the European Commission (DG Regional Policy) and the European Investment Bank group, 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 an innovative way. In particular, the resources managed through JEREMIE are provided on a repayment basis in order to be reinvested in other and more SMEs.