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The Baltic venture capital market will be united under a single flag

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Baltic VCAs join forces and establish Pan-Baltic Private Equity & Venture Capital Association (Pan-Baltic VCA) with the aim to unify cooperation and market the region as a whole.



Agreement for the establishment of Pan-Baltic VCA was signed on the 25th of August at Baltic VCA Summit in Pärnu. From the left: Kalmer Kikas, Chairman of the Board of ESTVCA, Janis Janevics, Member of the Board of LVCA and Dovydas Varkulevicius, Chairman of the Board of LT VCA.

Pan-Baltic Private Equity and Venture Capital Association (Pan-Baltic VCA) was established at the Baltic VC Summit 2016 in Pärnu last Thursday with the aim to develop an attractive and viable regional ecosystem for the fund managers and investors.

The teams of the Estonian, Latvian and Lithuanian private equity and risk capital associations will support the work of the Baltic Private Equity and Venture Capital Association. The Chairman of the Board of the Estonian Private Equity and Venture Capital Association, Kalmer Kikas, said that establishment of the umbrella organisation enables to share obligations, unify cooperation, and market the area as a whole.

Unique model

The Baltic Private Equity and Venture Capital Association is a unique form of cooperation since there are no such cross-region venture capital organisations in other parts of Europe. "The Baltic Innovation Fund is an example of successful cross-border cooperation. We need to further increase cooperation and bring small markets under one umbrella as otherwise the bigger countries have competitive advantage at involvement of private equity and venture capital," he said.

Kikas told that for the Baltic States, it is not reasonable to communicate with institutional investors outside the Baltic States, the business angels as well as venture capital companies separately and vice versa. "The central marketing and management of relationships is reasonable from the point of view of all three states and all parties," he said.


Simplified cooperation

The umbrella organisation also helps to concentrate the organisation of events and forums. "Investors would rather participate in an event where they can get an overview of all the Baltic States and not only Estonia. The Baltic Private Equity and Venture Capital Association will also collect, systematise, analyse and publish the sectoral data," said Kikas.

He also trusts that establishment of the umbrella organisation helps to coordinate cooperation regarding the development of lawmaking and regulations in the area of venture capital.

Learn more:

Kalmer Kikas
Chairman of the Board of the Estonian Private Equity and Venture Capital Association
kalmer.kikas@bpmcapital.eu
+372 501 9745

Kristiina Vassilkova
Managing Director of the Estonian Private Equity and Venture Capital Association
kristiina@estvca.ee
+372 5750 2049





SmartCap announced an open call to fund managers for direct investments portfolio

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Estonian Development Fund, SmartCap and European Investment Bank announced a call to find a private fund manager for the direct investment portfolio that includes 15 start-ups. The expression of interest must be submitted by October3rd. The results of the call will be disclosed by the end of the year.

Estonian Development Fund, SmartCap and European Investment Bank announced a call to find a private fund manager for the direct investment portfolio that includes 15 start-ups. The expression of interest must be submitted by October3rd. The results of the call will be disclosed by the end of the year.


European Investment Bank (EIB) was involved in the project in order to organise a transparent competition. According to Bruno Robino, representative of the EIB, the work done by the Estonian public sector to enliven the local venture capital market deserves credit. “The market has already been created, however, a viable venture capital market should be based on the private sector. It is positive that the Estonian government finds the need for these steps important and is implementing them,” he said.

 

Robino added that finding a fund manager from the private sector to manage tens of millions of euros from the taxpayers must not only be fair but also appear fair. “SmartCap has done everything in their power to make the competition fair for all potential participants,” he said.

 

Up to 10 million euros for continuation investments

Sille Pettai, Fund Manager of SmartCap, said that the private fund manager is expected to create a new fund, manage direct investments’ portfolio and make follow-on investments. “The existing shares of the Estonian Development Fund and Early Fund II will be incorporated, as well as up to 10 million euros for follow-on investments," she said. Teams with experience in early phase investments are expected to participate from Estonia and abroad.

 

The candidates that make it to the second round will be able to get acquainted with the portfolio of SmartCap in depth, after which they will be expected to shape their visions and submit their tenders. The second round will be closed in the end of November. The winner will be chosen before Christmas, taking into consideration the candidates’ previous experience and vision for the future. This will be followed by the last stage, including negotiations with the winning fund manager, which will result in the creation of a new fund. The new fund should commence its operations in Q1 2017.

 

Public funds will only be invested together with private investors

The winner of the call must invest and manage the fund in market conditions. The returned capital and portfolio companies from which SmartCap will exit before December 31, 2016, will not be included in the new fund.

 

The fund managed by the private fund manager will retain earlier investment principles, as all the ventures made into the companies' equity capital will be joint investments with private investors.

 

The direct investments will continue to be managed as before until the private fund manager is appointed. Applications can be filed until October 3rd, 2016, to smartcap@reorganisation.ee. Further information about the terms and conditions of the call can be found from the website of SmartCap.

 

Further information:

Sille Pettai

SmartCap Fund Manager

Sille.Pettai@Smartcap.ee

+372 5231 675

www.smartcap.ee

 

Mari Vavulski

SmartCap Board Member

Mari.Vavulski@Smartcap.ee

+372 5326 8116

www.smartcap.ee 



BPM Mezzanine Fund provided financing for paint producer Eskaro

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BPM Mezzanine Fund SICAV-SIF, SCA (BPM) has provided working capital financing and refinancing capital to Eskaro AS, a subsidiary of Eskaro Group AB (Eskaro). Eskaro is one of the leading paint producers in Estonia, Finland, Belarus, Russia and Ukraine. The company was established in Tallinn in 1993. Today, the company has production and commercial enterprises in 6 countries.



BPM Mezzanine Fund SICAV-SIF, SCA (BPM) has provided working capital financing and refinancing capital to Eskaro AS, a subsidiary of Eskaro Group AB (Eskaro). Eskaro is one of the leading paint producers in Estonia, Finland, Belarus, Russia and Ukraine. The company was established in Tallinn in 1993. Today, the company has production and commercial enterprises in 6 countries.

Member of the Board of Eskaro Andres Assor commented: „This transaction is an important step forward for us providing financial stability and strength for further growth. Eskaro brands are among the most recognised and trusted by consumers in our key markets. Attracting a strong financial partner allows Eskaro to continue gaining the market share in the countries we operate.”

“Eskaro’s brands hold strong positions in the DIY segment in all of its key markets: Estonia, Russia, Ukraine and Belarus. The company has proven to be able to generate stable cash flows over a long period of time. The project has significant growth prospects and export potential matching the main objectives sought by BPM. The management team has extensive experience in the sector and a long career in the company,” said Priit Veering, Partner of BPM Capital.

For further enquiries, please contact:

BPM Capital: Priit Veering, tel: +372 605 0074, e-mail: priit.veering@bpmcapital.eu

Eskaro: Andres Assor, tel: +372 553 6202, e-mail: andres.assor@eskaro.com

More information about BPM Capital

BPM Capital (www.bpmcapital.eu) is an independent investment manager operating out of two offices, in Tallinn and Warsaw. It has been founded and is managed by Kalmer Kikas, Martin Reinson, Paweł Zabrzycki and Priit Veering. BPM Mezzanine Fund, managed by BPM Capital, is supported by prominent international and domestic institutional investors. BPM was originated through the Baltic Innovation Fund (BIF) initiative created by cooperation between Estonia, Latvia, Lithuania and the European Investment Fund.

More information about Eskaro

Eskaro (www.eskaro.com) is one of the leading paint producers in Estonia, Latvia, Finland, Belarus, Russia, and Ukraine. The plants of the Eskaro produce more than 30 million litres of products annually with 480 people working in production, logistics and distributor support in the EU, Belarus, Russia and Ukraine. With annual revenue of 31 million EUR in 2015 Eskaro’s factories manufacture over 400 categories of products including paints, prime coatings, varnishes, wood protection liquids, putty, glues, and solvents. The majority of products are water borne, which are environmentally friendly as opposed to alkyd paints.

BPM Mezzanine Fund provided financing for expansion and refinancing of the leading Baltic data center services provider Digitalas Ekonomikas Attistibas Centrs (“DEAC”)

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BPM Mezzanine Fund has invested in the leading Baltic data center operator DEAC to support its growth. The investment will be used for improving technical equipment and infrastructure, as well as refinancing a part of existing liabilities. DEAC has built over the years a very strong platform in terms of technical infrastructure and product portfolio. Among its clients the company has a number of industry leaders in the Baltics as well as in Russia.


BPM Mezzanine Fund SICAV-SIF, SCA (BPM) has invested in the leading Baltic data center operator DEAC to support its growth. The investment will be used for improving technical equipment and infrastructure, as well as refinancing a part of existing liabilities. DEAC has built over the years a very strong platform in terms of technical infrastructure and product portfolio. Among its clients the company has a number of industry leaders in the Baltics as well as in Russia.

Commenting on the deal, the CEO of DEAC, Mr. Andris Gailitis, noted that with the help of BPM the
company is now very well positioned to further strengthen its foothold in its core markets Latvia, Russia, Ukraine, Lithuania, Estonia and can pursue more aggressive expansion route. “We believe our product portfolio which ranges from cloud services to complex custom-made data security solutions is very competitive.”

Partner of BPM Capital, Mr. Martin Reinson added: “We appreciate highly the opportunity to work with one of the market leaders in the Baltics. DEAC has demonstrated flexibility and ambition to grow in such competitive market. The management team has been deeply involved in shaping the local data center services landscape over the past 17 years and combines a unique skillset needed to succeed. We look forward to cooperating with DEAC and are eager to support their expansion plans.”

For further enquiries, please contact:

BPM Capital: Martin Reinson, tel: +372 605 0072, e-mail: martin.reinson@bpmcapital.eu

DEAC: Andris Gailitis, tel: 371 6707 2100, e-mail: AGailitis@deac.eu

More information about BPM Capital

BPM Capital (www.bpmcapital.eu) is an independent investment manager operating out of two offices, in Tallinn and Warsaw. It has been founded and is managed by Kalmer Kikas, Martin Reinson, Paweł Zabrzycki and Priit Veering. BPM is supported by prominent international and domestic institutional investors. BPM was originated through the Baltic Innovation Fund initiative created by cooperation between Estonia, Latvia, Lithuania and the European Investment Fund. Portfolio companies include MarkIT, Optometrijas Centrs, Eskaro and DEAC.

More information about DEAC

DEAC (www.deac.eu) is secure data center services provider headquartered in Latvia. It is providing cloud services, dedicated servers, colocation services, network services, managed services and data security solutions. The Company has two physical data centers in Riga with a total of 300 RACKs now and 400 more to come in next stage, POPs in London, Frankfurt, Amsterdam, Moscow, and Kiev.


BaltCap exits gas infrastructure and trading company Energate

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BaltCap, the largest private equity and venture capital investor in the Baltics, exited gas infrastructure and trading company Energate. The company was acquired by a group of private investors.


BaltCap, the largest private equity and venture capital investor in the Baltics, exited gas infrastructure and trading company Energate. The company was acquired by a group of private investors.

Energate is a gas infrastructure and trading company operating pipelines in Estonia with the core network near Tallinn and Tartu.

BaltCap acquired the company in 2008. During the holding period Energate completed several acquisitions, annual sales volumes increased from 2 million m3 to 10 million m3 and the pipeline expanded from 37 km to 123 km.

It is the third successfully developed and exited infrastructure asset by BaltCap this year. In January, BaltCap exited 18MW Tuuleenergia wind farm in Estonia and 24MW Eurakras wind farm in Lithuania to Lietuvos Energija.

Contacts for enquiries:

Kristjan Kalda
BaltCap
Investment Director
Tel: +372 50 87 967
kristjan.kalda@baltcap.com
www.baltcap.com

VARUL presents: Warranty & Indemnity Insurance Seminar, November 28th

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The use of Warranty & Indemnity Insurance has been a common practice in the M&A transactions in Europe for a while now. As the insurance product is getting more widespread and premiums are becoming less expensive, market participants can now consider the W&I insurance in transactional risk allocation. Join the seminar on November 28th.



The use of Warranty & Indemnity Insurance has been a common practice in the M&A transactions in Europe for a while now. W&I is a product that is intended to cover breaches of warranties given in M&A transaction documents. As the insurance product is getting more widespread and premiums are coming less expensive, market participants can now consider the W&I insurance in transactional risk allocation.


When & Where?

28 November, 15:00 - 18:00 at Nordic Hotel Forum


Agenda and Speakers

The seminar is dedicated to explaining the uses and trends in the W&I Insurance market to ESTVCA members. The speakers include: Ms. Nikola Pamler who leads Aon’s German transaction solutions team and where she is responsible for placing transactional risk solutions for M&A transactions such as warranty and indemnity insurances, tax insurances, litigation insurances or title insurances, Dr. Danguole Hackel of DLA Piper UK LLP who deals with German transactions, compliance issues in M&A transactions as well as advising companies and insurers on warranty & indemnity insurance matters, and Mr. Thomas M. Mannsdorfer, the Underwriting Director of Transaction Risk Insurance at ANV Global Services Ltd., who has designed, dealt with the build-up and now leading the transaction risk insurance practice of ANV.

Seminar will be moderated by Kadri Kallas and Sander Kärson, Co-Heads of Corporate and M&A at VARUL.


After the official part VARUL will host a networking with some fine drinks and snacks.


Registration

Event is free of charge for all ESTVCA members. Please register HERE by November 23rd.


About Varul

Law Firm VARUL was established in 1994. In April 2016 VARUL joined the Tark Grunte Sutkiene Group. With offices in Estonia, Latvia and Lithuania, the firm employs a total of 140 lawyers making it one of the leading law firms in the Baltics. Until the rebranding is finalised, the firm will continue operating under the VARUL trademark in Estonia.


BaltCap announces new Partners

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BaltCap announces the promotion of four long term team members Kristjan Kalda, Oliver Kullman, Martins Jaunarajs and Kornelijus Celutka to Partner.




BaltCap, the largest private equity and venture capital firm in the Baltic States announces the promotion of four long term team members Kristjan Kalda, Oliver Kullman, Martins Jaunarajs and Kornelijus Celutka to Partner.

Kristjan Kalda and Oliver Kullman are based in BaltCap’s office in Tallinn, Estonia. They are both dedicated members of the BaltCap private equity funds’ team. Kristjan has been responsible for a number of successful investments including gas distribution and trading company Energate, wind farm developer Tuuleenergia, aircraft maintenance provider Magnetic MRO and financial process automation company Fitek.

Oliver Kullman’s contribution has been very valuable in healthcare investments including clinical laboratory Quattromed (exited to Synlab in 2013) and current investments dental care chain Unimed and occupational healthcare provider Qvalitas, both leading companies in their field in Estonia. He is also looking after the digital media agency FCR Media and participated in the investment in eKool, an e-school service provider.

Martins Jaunarajs is based in BaltCap’s office in Riga, Latvia. He is leading BaltCap Latvia Venture Capital Fund team and BaltCap Growth Fund team locally. Martins has led BaltCap’s investments in concrete floor specialist Primekss and software developer Clusterpoint among others.

Kornelijus Celutka is based in BaltCap’s office in Vilnius, Lithuania. He is leading Lithuania SME Fund team and BaltCap Growth Fund team in Lituania. Kornelijus has been responsible for BaltCap’s investments in gym chain Impuls, private healthcare service provider InMedica, coffee shop chain Coffee Inn and others. Before joining BaltCap, Kornelijus worked in the investment banking division at Deutsche Bank in London.

Peeter Saks, Managing Partner of BaltCap said, “We thank Kristjan, Oliver, Martins and Kornelijus for their hard work and long term dedication over so many years. We are sincerely happy to see their continuous commitment to BaltCap and look forward to the future successes together.”

Additional information:

Martin Kõdar
BaltCap
Managing Partner
Phone: +3726650280
martin.kodar@baltcap.com

Riigi riskikapitali portfellile valiti erafondivalitseja

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Euroopa Investeerimispanga ettepanekul määratud sõltumatu valikukomitee valis Eesti Arengufondi ja SmartCapi korraldatud erafondivalitseja konkursi võitjaks Tera Ventures’i. Tera Ventures on Eesti turul tegutsemist alustav riskikapitali fondivalitseja, kuhu kuuluvad SmartCapi senised investeeringutejuhid Andrus Oks, Stanislav Ivanov ning nõunik James Patrick McDougall.



Euroopa Investeerimispanga ettepanekul määratud sõltumatu valikukomitee valis Eesti Arengufondi ja SmartCapi korraldatud erafondivalitseja konkursi võitjaks Tera Ventures’i. Tera Ventures on Eesti turul tegutsemist alustav riskikapitali fondivalitseja, kuhu kuuluvad SmartCapi senised investeeringutejuhid Andrus Oks, Stanislav Ivanov ning nõunik James Patrick McDougall.

Euroopa Investeerimispanga (EIB) esindaja Bruno Robino sõnul olid kõigil teises voorus pakkumise teinud meeskondadel omad tugevused. Tera Ventures’i kui võitja tugevustena toodi välja pakkumise finantstingimuste atraktiivsus ning selge pikaajalise visiooni olemasolu nii portfelliettevõtete väärtuse kasvatamise kui enda rolli osas Eesti riskikapitalimaastikul. Samuti tunnustati meeskonna häid teadmisi kohalikust riskikapitaliturust ning seda, et tegu on end varasemalt tõestanud ja kokkutöötanud meeskonnaga, mis on era- ja riskikapitalifondidesse investeerimisel investorite jaoks üks võtmeküsimusi ja fondivalitseja pikaajalise juhtimisvõimekuse näitaja.  


EIB esindaja Bruno Robino ütles, et valikukomitee nägi oodatult kõrget kandidaatide taset. Robino sõnul muutub olemasoleva portfelli valitsemine riigile soodsamaks tänu pakutud madalamale valitsemistasule. “Kuna uue fondivalitseja meeskond investeerib portfelli ka omakapitali, on fondivalitsejal oluline lisamotivatsioon portfelli väärtust maksimaalselt kasvatada,” rõhutas Robino.


SmartCapi fondijuht Sille Pettai sõnul algavad nüüd läbirääkimised reorganiseerimise tehniliste detailide osas Tera Ventures'i esindajatega. Läbirääkimiste tulemusel loodetakse anda investeerimisportfelli juhtimine üle erafondivalitsejale 2017. aasta I kvartalis. Teiseks ja kolmandaks jäänud kandidaatide pakkumised on pandud ootele, et Tera Ventures’ga läbirääkimiste ebaõnnestumisel jätkata läbirääkimisi sobiva lahenduse osas pingereas järgmise meeskonnaga.


Kokku osales konkursil kuus meeskonda, kellest neli kvalifitseerusid teise vooru ning said sellega võimaluse tutvuda olemasoleva otseinvesteeringute portfelliga, kujundada strateegia investeeringute edasiseks haldamiseks ning teha lõpliku pakkumise EIB ettepanekul määratud valikukomiteele. Edasipääsenud meeskonnad olid kõik pikaajalise era- või riskikapitali taustaga, mille koosseisu tugevdasid rahvusvahelised liikmed.


Reorganiseerimise järgselt jätkab sõltumatu erafondivalitseja investeerimistegevust varasemate põhimõtete järgi – investeeringuid portfelliettevõtete omakapitali tehakse üksnes koos teiste erainvestoritega. Konkursi võitja peab investeerima uude fondi omakapitali ning juhtima seda turutingimustel. Uuele erafondivalitsejale ei anta üle seni väljutud investeeringutest saadud tulu ega osalusi, millest Arengufond või SmartCap väljub enne uue fondivalitseja tegevuse algust.


Käesoleva konkursiga saab läbi järjekordne etapp Eesti Arengufondi ja SmartCapi tegevuse reorganiseerimisest. Varasemalt on reorganiseerimise osana juba toimunud seiretegevuse üleandmine Riigikogu Kantselei juurde moodustatud Arenguseire Keskusele ja Eesti idufirmade tugiüksuse Startup Estonia tõstmine KredExi koosseisu ning hetkel on SmartCapis juba uue fondifondi kontseptsiooni raames käimas kiirendifondidesse investeerimise protsess.


Lisainfo:
Sille Pettai
SmartCapi fondijuht
Sille.Pettai@smartcap.ee
+372 523 1675




The New Estonian Limited Partnership Regime

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Estonian Limited Partnership Fund is a new, flexible and tax-transparent investment vehicle for private equity and venture capital investments.




DERLING partners Hannes Vallikivi, Rolan Jankelevitsh and Andres Siigur in cooperation with experts from CMS London and Luxembourg offices and ESTVCA Legal Committee prepared a report for EBRD on Estonia’s new investment fund legislation back in 2016. The report focused on regulation and taxation of private equity and venture capital funds with the aim to assess new regulation’s suitability to the market needs.

As the result of the analysis, the Ministry of Finance made several amendments to the draft law and with the Investment Funds Act of 14 December 2016, a new regime of Estonian limited partnership funds (LPF) has been enacted. LPF is an investment vehicle designed primarily for closed - end collective private equity and venture capital investments.

The new regime has been designed along the lines of the best qualities of limited partnership structures of various countries, which have been traditionally considered as attractive jurisdictions for collective private equity and venture capital investments, such as UK, Luxembourg and Jersey.

Download brochure


Flexibility

The IFA sets forth a limited set of mandatory rules, which each LPF must comply with. It leaves remarkable flexibility and freedom for the partners to agree in the limited partnership agreement (LPA) on the rules applicable to the LPF.

Among others, the partners have the right to regulate the following matters in the LPA:

  • partnership's purpose and investment policy;
  • duration of the partnership;
  • partners’ contributions, including capital and loan;
  • allocations, sharing and distributions of profits;
  • payment of carried interest;
  • appointment, removal and withdrawal of general and limited partners;  
  • powers of the partners;
  • payment of fees and expenses, including management fees, establishment costs, transaction costs, and general partner’s fee income;  
  •  transfer of partners’ interests;
  • termination of the partnership.


Structure and Management

Each LPF must have at least one general partner (GP) and one limited partner (LP). Furthermore, as it is an alternative investment fund, it must invest funds raised from at least two investors (e.g. the GP and the LP or two LPs).

An LPF may operate as a self-governed partnership or a limited partnership managed by a management company.

The assets of a self-governed LPF are managed by its GP. In the event a management company has been contracted, the management company has the authority to manage the assets according to the management agreement between the LPF and the management company.

LPs may engage in the management of the LPF according to the rights given to them by the LPA.


Partners' liability

The GP has unlimited liability for the obligations of the LPF. The liability of an LP is limited to the amount of the LP’s contribution to the LPF, if the LP refrains from participating in the daily management of the LPF.

To provide clarity with respect to the liability of LPs, the IFA sets forth the so-called safe harbour regime, whereby an LP is considered not to participate in the daily management of the LPF if, among other things, the LP:

  • represents the LPF under a specific power of attorney;
  • exercises general LPs’ rights arising from laws or set forth in the LPA;
  • advises the GP or the management company in matters pertaining to the management of the LPF, unless such advice constitutes binding instructions, which the GP or the management company must adhere to;
  • guarantees or secures the obligations of the LPF;
  • participates in amending the LPA;
  • exercises voting rights or otherwise expresses an opinion on any of the following matters:
  • continuing or terminating the activities of the LPF;
  • concluding transactions for the acquisition of assets by the LPF;
  • transferring or encumbering partners’ interests;  
  • amending the investment policy of the LPF;
  • merger of the LPF
  • appointment of a partner;
  • withdrawal or removal of a partner;
  • making a transaction between the LPF and its partner.


Establishment

    An LPF is established by the conclusion of its LPA and its registration with the Estonian Commercial Register (äriregister). The LPF is registered with the Estonian Commercial Register on the basis of an application executed and submitted by:

    • the GP or each GP if the LPF has more than one GP,
    • and unless the LPF is established as a self-governed partnership, the management company.

    A statement by the Estonian FSA (Finantsinspektsioon) confirming that the GP or the management company has been properly registered or authorised as an alternative investment fund manager (AIFM) must be appended to the application.

    An application is normally processed and the LPF is registered within five business days.


    Confidentiality of LP-s

    An LPF does not have to publish the identity of its LPs or the amount of the investments made by each LP.


    Authorisations

    An LPF is an alternative investment fund within the meaning of Directive 2011/61/EU (AIFMD). For this reason, at least one GP or the management company must be

    • authorised to operate as an AIFM in Estonia or another Member State of the European Economic Area, or
    • registered with the Estonian FSA as an AIFM.

    An Estonian company can be registered with the Estonian FSA as an AIFM if it intends to operate as an AIFM but is not required to obtain an authorisation of AIFM according to the exception laid down in Article 3 of the AIFMD. To register with the Estonian FSA, the company must provide the FSA with information on the LPF and its planned activities. As an AIFM, it must submit its annual reports to the Estonian FSA.


    Tax transparency

    The availability of a fiscally transparent fund vehicle has been widely recognised as a critical condition for creating an attractive environment for investment fund structuring. This condition has now been met in Estonia by introducing a full fiscal transparency regime applicable to LPFs.

    Fiscal transparency means that an LPF is not considered a taxpayer or an Estonian resident for the purposes of Estonian tax laws, and the income earned by an LPF is immediately allocated to its investors in proportion to their stakes in LPFs.

    One of the objectives of such “see-through” approach is to ensure that the foreign investors of the LPF are treated, tax-wise, in exactly the same way as when investing directly in company shares. One important consequence of fiscal transparency is that the foreign investors should normally have full access to double taxation treaties between the residence state of the investor and the source state of the respective income.

    In the case of non-resident investors, the LPF’s income allocated to such investors will not be taxed in Estonia in most cases. Such income will only be taxed in Estonia in situations where the same income, should it have been earned by a non-resident directly, would be taxed in Estonia. Such situations exclusively include income from Estonian real estate (capital gain, rental and interest income). The non-resident investors will only have to declare the investment income earned through the LPF, if such income is taxable in Estonia.

    An LPF itself will have to submit annual declarations to the tax authority regarding the income earned, the investors of the LPF, the share of LPF’s income allocated to each investor and the tax residence of each investor.


    BaltCap invests in leading Estonian classified portals auto24 and Kuldne Börs

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    Baltic private equity house BaltCap together with management acquires 100% of Sanoma Baltics AS, the operator of Estonian online classified sites auto24 and Kuldne Börs from Sanoma Media Finland OY.


    BaltCap Private Equity Fund II and the management team signed an agreement to acquire Sanoma Baltics AS. The company operates the auto24 classified portal in Estonia with a strong position in car, motorbike, boat and heavy equipment advertising. It also operates the Kuldne Börs generalist classifieds site in a variety of categories, such as construction materials, agricultural equipment, pets and household goods to name a few.

    “The strong local classified sites auto24 and Kuldne Börs are very well managed and operate in a growing market. The sites provide a very useful service to Estonian consumers and businesses by providing an efficient online marketplace. We are excited to work together with the management team to further improve and grow the business of both auto24 and Kuldne Börs,” said Oliver Kullman, partner at BaltCap.

    Margus Tomberg, CEO of Sanoma Baltics added, “The new owner BaltCap opens up solid investment and development opportunities to strengthen our existing business and also to expand beyond classified listings. We are looking forward to developing new and innovative solutions to address customer needs.”

    “We wish the team and BaltCap a lot of success with the company. From now on, Sanoma Media Finland will focus on further developing our strong, multi-channel operations in Finland,” commented Pia Kalsta, the CEO of Sanoma Media Finland.

    The financing is partly provided by LHV pension funds. The fund manager Andres Viisemann said, “Recent legislative changes make it possible for pension funds to make such local investments. Managing pension savings of €1 bn, we plan to increase investments in Estonia,” adding that local investments provide a higher expected return and also boost the local economy.

    The transaction is expected to close in spring 2017, following approval from the Estonian Competition Authority.

    About BaltCap Private Equity Fund II

    BaltCap Private Equity Fund II (BPEF II) makes equity investments in innovative companies based in the Baltic region focusing on buy-and-build opportunities. BPEF II was established in cooperation with the European Investment Fund (EIF) involved in the project through the Baltic Innovation Fund (BIF). The BIF is an initiative created by cooperation between the Republic of Estonia, the Republic of Latvia, the Republic of Lithuania and EIF
    .

    Sanoma Baltics AS

    Sanoma Baltics AS is the operator of classified portals auto24.ee, veetehnika.ee, rasketehnika.ee, mototehnika.ee and kuldnebors.ee. The company has around 20 employees in Tallinn and Tartu offices, creating a turnover of €4.4 million.

    LHV Varahaldus

    The pension funds managed by LHV have over 170,000 clients. The volumes of the pension funds managed by LHV Varahaldus as at the end of February amounted to €991million.

    Contacts for enquiries:

    Oliver Kullman                                Margus Tomberg         

    BaltCap, Partner                               Sanoma Baltics, CEO

    Tel: +372 6650 280                          Tel: +372 6208 884

    oliver.kullman@baltcap.com              margus.tomberg@sanoma.ee             

    www.baltcap.com                             www.sanoma.ee



    BaltCap increased its ownership in TREV-2 by acquiring an additional 38% stake from East Capital Explorer AB for €5.7 million

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    BaltCap acquires majority in TREV-2.




    BaltCap increased its ownership in TREV-2, the leading Estonian infrastructure construction company by acquiring an additional 38% stake from East Capital Explorer AB for €5.7 million. BaltCap’s total ownership after the acquisition reached 75%.


    TREV-2 has been in BaltCap’s portfolio since December 2010. Kristjan Kalda, partner of BaltCap commented, “Infrastructure construction market in Estonia has been challenging in recent years. At the same time, TREV-2 has a young and ambitious team that BaltCap wants to continue supporting.”
    TREV-2 generated revenues of EUR 51m in 2015 and EUR 54m in 2016, with EBITDA margins of approximately 4 and 5 percent, respectively.

    Contacts for enquiries:

    Kristjan Kalda

    BaltCap         
    Partner                                                
    Tel: +372 50 87 967 
    kristjan.kalda@baltcap.com
    www.baltcap.com    


    About TREV-2 Group

    AS TREV-2 Group is a leading infrastructure construction company in Estonia, with its history and experience dating back to the 1960s. The company’s main activities include road construction, repair and maintenance and environmental construction. In addition, TREV-2 operates several gravel, sand and limestone quarries, and produces asphalt and a range of road safety products. The company has 350 employees and is headquartered in Tallinn.

    About East Capital Explorer

    East Capital Explorer AB is a Swedish investment company, offering investment opportunities in Eastern Europe, where the Baltic countries represent the company’s largest investment region. The company primarily invests in unlisted assets within the private equity and real estate segments.

    Livonia Partners to acquire Santa Monica Networks in Latvia and Lithuania together with management

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    Livonia Partners to acquire Santa Monica Networks in Latvia and Lithuania together with management



    Livonia Partners, a pan-Baltic private equity firm, and Santa Monica Networks management, agreed to acquire Santa Monica Networks Latvia and Santa Monica Networks Lithuania, leading providers of network and IT security solutions in the Baltic region, from Santa Monica Networks Group. In a related transaction, Elisa Corporation of Finland has entered into an agreement to acquire Santa Monica Networks companies in Finland and Estonia.

    “Santa Monica Networks has been a long-term trusted technology partner to customers in the region. The company operates in a high-growth business area benefiting from data traffic surges on the back of on-going systems integration and development of cloud and IoT solutions, as well as cybersecurity gaining in importance,” says Kristīne Bērziņa, a founding partner at Livonia.

    The Santa Monica Networks investment is the third for Livonia Partners Fund I, whose strategy is to invest in medium-sized companies in the Baltics that are well-managed and growing. The fund acquired Estonia-based sauna manufacturer Ha Serv in February last year, and in October invested in Hortes, Estonia’s leading home and gardening retail brand.

    Santa Monica Networks in Latvia and Lithuania had revenue of 23.4 million euros in 2016. The company’s 52 employees include many top Baltic networking and security experts. Santa Monica Networks provides solutions to large telecommunication, IT and media companies, public sector organizations, financial institutions and industrial companies, among others. The company works with several leading global networking, data centre and security infrastructure vendors, such as Cisco, Hewlett Packard Enterprise and Juniper Networks.

    The transaction will give Livonia a controlling stake in the Lithuanian and Latvian operations of Santa Monica Networks, with management retaining a significant stake. “This is very much a people business and we’re proud to team up with an experienced management team and their outstanding dedicated team to continue developing the business in line with its growth potential. That is Livonia’s approach,” Mindaugas Utkevičius, Livonia’s founding partner in Lithuania.

    “Our partnership with Livonia creates great conditions for our continued growth and development, also in terms of the know-how and networks that the fund and its partners can share,” says Uģis Bērziņš, Chairman of the Board of Santa Monica Networks Latvia.

    For further information contact:

    Kristīne Bērziņa, Partner, Livonia Partners

    +371 2834 4808, kristine.berzina@livoniapartners.com

    Mindaugas Utkevičius, Partner, Livonia Partners

    +370 6207 1777, mindaugas.utkevicius@livoniapartners.com

    Uģis Bērziņš, CEO and founder, Santa Monica Networks SIA

    +371 2920 9944, ugis.berzins@smn.lv

     

    Livonia Partners is a private equity investment firm based in the Baltics, currently managing €83 million as part of the Livonia Partners Fund I and the Livonia Partners EIF Co-Investment Fund. Run by founders Kaido Veske, Kristīne Bērziņa, Rain Lõhmus, and Mindaugas Utkevičius, its investors are domestic and international financial institutions. Livonia was partly originated through the Baltic Innovation Fund (BIF), a common initiative of the Republic of Estonia, the Republic of Latvia, the Republic of Lithuania and the European Investment Fund.

    www.livoniapartners.com

    Santa Monica Networks is the Baltic region’s go-to provider for network integration, design and installation services, as well as IT security and data centre solutions. Clients include large business, government and financial institutions, among others. The company works with leading global vendors of networking, data centre and security infrastructure.

    www.smn.lv

    www.smn.lt 

    BaltCap to launch €50m investment fund for Baltic SMEs

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    BaltCap is planning to launch a regional investment fund worth €50 million in cooperation with Kredex and Baltic pension funds to offer growth capital to SMEs in Estonia, Latvia and Lithuania.



    BaltCap is planning to launch a regional investment fund worth €50 million in cooperation with Kredex and Baltic pension funds to offer growth capital to SMEs in Estonia, Latvia and Lithuania. The fund is meant for local and Baltic businesses that want to launch new products and services, expand their operations through purchase and takeover deals and whose ambition is to grow and become market leaders, Baltcap said.

    The new fund will be created in cooperation with BaltCap, the European Investment Fund (EIF), Kredex and local pension funds, which allows pension funds to invest in Baltic companies to strengthen their equity capital. The planned size of the fund is €50 million.

    According to Martin Kõdar, a managing partner at BaltCap, there are excellent growth opportunities in Estonia, Latvia and Lithuania in traditional as well as new branches of economy. "The region's SMEs need investments to retain their competitive ability and increase productivity," he added. "We see that the demand for growth capital is still big in Baltic countries."

    Kodar noted that equity capital investments in the private sector in the region amount to 50 percent of the EU average. "With risk capital investments, the ratio has improved in the past few years thanks to international investors, but there is still not enough growth capital," he said.

    EIF: BaltCap a leading fund manager in region

    According to deputy chief executive of EIF Roger Havenith, BaltCap has proven itself as a leading fund manager in the region and the new fund will expand the scope even more. He said that the Baltcap Growth Fund being prepared by Baltcap is the fifth fund that will be brought to the market with support from EIF in the framework of the Baltic Innovation Fund initiative, adding that the EIF is happy with BaltCap's positive impact on the regional capital market.

    The creation of the fund will soon be complete. BaltCap has entered into initial agreements with institutional investors to attract more than €40 million worth of assets. Among bigger investors are Swedbank's pension funds and, through the Baltic Innovation Fund, EIF and Kredex as well.

    The establishment of the fund must be approved by the Estonian Financial Supervision Authority and the fund must be entered into Estonia's commercial register. The application to set up the fund has already been submitted to the Financial Supervision Authority.



    Karma Ventures invests in SpectX

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    The startup founded by former security engineers at Skype and Swedbank is developing a powerful analytics software solution for rapid processing of unlimited amounts of data.


    SpectX has announced raising investment from Karma Ventures for product development and growth. The startup founded by former security engineers at Skype and Swedbank is developing a powerful analytics software solution for rapid processing of unlimited amounts of data. The product will be publicly launched in autumn 2017.

    The company’s technology innovation enables handling of machine generated data in its original location rather than loading it into separate tools and databases for processing. It enables analysts to work and experiment with data faster than is possible with existing tools without fear of errors halting their mission.

    SpectX’ CEO Renee Trisberg says that the investment is used mainly for product development. “We have offered SpectX’ solution for testing to several technology companies and government organisations experiencing similar restraints in log and data analysis as we were seeing during our previous career. Their feedback is active and positive, showing strong demand for enhanced features and scalability,“ Trisberg noted.

    According to Margus Uudam, founding partner of Karma Ventures, the investors were impressed by the elegant technology behind SpectX. “There is no other product in the market as fast and flexible as SpectX for analysing large unstructured data sets. The professionalism of the team and the initial product they have built show significant potential,” Uudam said.

    As the size of digital universe is doubling every two years, data-based decisions are becoming an inescapable necessity for enterprises and governments. Extracting information from machine generated data poses its challenges because of its high volume, volatile structure and scattered storage. There are many log analysis and business intelligence solutions in the market but most of them are priced by data volume and offer limited analytics features compared to SpectX.

    SpectX’ solution is currently used by several successful technology enterprises, among them Starship Technologies, a company developing small self-driving robotic delivery vehicles. Its speed, flexibility and ease of use is praised by data scientists, security incident handlers as well as system administrators.


    Startup Estonia and ESTVCA publish freely available Startup Model Documents

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    Documents are made freely available in the hope that they will help to educate the Estonian startup community, speed up foundation, team-building and early stage investment process, and lower the legal costs.





    Startup Estonia and Estonian Private Equity and Venture Capital Association promote industry-standard legal documents in Estonia so startups and investors can focus on company and deal specific matters. These documents are made freely available in the hope that they will help to educate the Estonian startup community, speed up foundation, team-building and early stage investment process, and lower the legal costs.

    However, these documents should be seen as starting point only and should be tailored to meet specific circumstances because no two companies or investments are the same.

    The documents have been drafted by a working group of EstVCA Legal Committee headed by Antti Perli (Ellex Raidla) and including Kristel Raidla-Talur (Cobalt), Maivi Ots (Eversheds Sutherland), Valter Võhma (Hedman Partners), Toomas Prangli (Sorainen), Kuldar-Jaan Torokoff (Fort Legal), Ulla Helm (Glimstedt) and Ergo Blumfeldt (Triniti).

    Neither Startup Estonia, EstVCA nor any member of its committees or working groups takes any responsibility for the content of the documents or the consequences of using them and none of the documents should be construed as legal advice for any particular facts or circumstances.

    IT IS ESSENTIAL THAT LEGAL ADVICE IS SOUGHT BEFORE USING THE DOCUMENTS!

    We are certain that the documents can be improved and, to that end, would welcome feedback from as many market participants as possible. Using the feedback and continuing experiences in the market we intend to update these documents. We encourage providing feedback directly into the Google Docs versions of the documents. General comments and questions on the documents may also be sent directly to Antti Perli, the main author of the model documents.

    By downloading or accessing any document, you agree that the document you download or access may only be used by you for your personal or business use and may not be sold, redistributed or republished (including on another website) without the express written consent of Startup Estonia.

    VIEW DOCUMENTS HERE


    BaltCap launched new €50m regional growth fund

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    The largest Baltic private equity firm BaltCap launched a new regional fund, BaltCap Growth Fund (BGF) to provide growth capital to small and medium-sized companies in all three Baltic countries.




    The largest Baltic private equity firm BaltCap launched a new regional fund, BaltCap Growth Fund (BGF) to provide growth capital to small and medium-sized companies in all three Baltic countries.

    The new BGF with a target size of EUR 50m will provide growth capital to 15-20 companies to create regional market leaders and increase exports, being a brand-new instrument in a market with such an investment focus. BGF held its first close at EUR 40m and it is managed by the experienced pan-Baltic investment team, in which Heidi Kakko and Marek Kiisa are the newest additons to the BaltCap team in Estonia.

    According to BaltCap’s estimation, the demand for growth capital remains high in the Baltic states while the opportunities for growth are very good in both traditional and new industries of Estonia, Latvia and Lithuania. The SMEs of the region are in need of investments to maintain their competitiveness and increase their productivity.

    BGF Partner and Investment Committee Member Heidi Kakko commented that demand for a new type of fund to enter the market is very high. “Until now, Estonia, Latvia and Lithuania have had scarce opportunities to finance the growth of companies with a turnover of 1-5m EUR per annum. At the same time, there has been a need for capital for further growth for such companies and this is where BGF will fill a significant gap,” she said.

    Another new Partner of BGF, Marek Kiisa added that the new fund will focus mainly on investments ranging from 0.5 to 3m EUR. “It is also important to mention that finally local pension funds will be able to make direct investments to small and medium-sized enterprises in the Baltics,” Kiisa said.

    Martin Kõdar, the Managing Partner of BaltCap admitted that one of BaltCap’s biggest strengths is highly professional experienced team. “We are glad to welcome two new investment professionals – Heidi and Marek – to join our team and launch the new fund. Our dedicated growth investment team, led by Kornelijus Celutka in Lithuania and Martins Jaunarajs in Latvia in addition to the new team members in Estonia, is certainly one of the main reasons why pension fund investors have trusted BaltCap to manage this new fund. We are also grateful for EIF’s continued support to BaltCap and BaltCap Growth Fund,” he said.

    BaltCap Growth Fund is a continuation of growth capital strategy for BaltCap. In 2001, BaltCap established its first growth strategy fund, the Baltic SME Fund, which was followed by two JEREMIE initiative funds in Latvia and Lithuania, established in 2010-2011.

    BaltCap Growth Fund is the fifth fund introduced to the market by BaltCap with the support of the European Investment Fund within the framework of Baltic Innovation Fund’s initiative, a programme supported by the Republic of Estonia, the Republic of Latvia and the Republic of Lithuania and the EIF, as well as local pension funds.

    Roger Havenith, Deputy Chief Executive of EIF, stated, “BaltCap’s record and proven capabilities as investors in this region are unmatched and the establishment of the new fund would extend their reach further. This is the 5th commitment issued by EIF under Baltic Innovation Fund initiative and represents a significant milestone in the implementation of this unique pan-Baltic cooperation project. Being both the architect and key investor in the Baltic Innovation Fund alongside our National Promotional Institution partners, EIF is confident in the positive market impact the launch of this fund would have.”


    About EIF

    The European Investment Fund (EIF) is part of the European Investment Bank group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance 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.


    About Baltic Innovation Fund

    The Baltic Innovation Fund is an innovative investment initiative created by cooperation between the Republic of Estonia, the Republic of Latvia, the Republic of Lithuania and EIF that is unique in its nature across Europe. The Baltic Innovation Fund will invest EUR 130 million into private equity, mezzanine and venture capital funds focused on the Baltic States during 2013-2017. It is a key initiative with EIF partnering with three important national agencies – Altum (Latvia), KredEx (Estonia) and Invega (Lithuania). This unique trans-national process provides a real opportunity to further develop the Baltic PE & VC market.


    Additional information:

    Heidi Kakko
    Partner and Investment Committee Member of BaltCap Growth Fund
    Phone: +37256249959
    heidi.kakko@baltcap.com
    www.baltcap.com

    Photo by Artem Verbo on Unsplash


    Livonia Partners consortium to invest in cable network operator Cgates

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    Livonia Partners together with LHV Pension Funds and Ambient Sound Investments, agreed to invest in Cgates, a leading Lithuanian provider of cable television and internet services.



    Livonia Partners, a pan-Baltic private equity firm, together with LHV Pension Funds and Ambient Sound Investments, agreed to invest in Cgates, a leading Lithuanian provider of cable television and internet services.  

    The investor consortium led by Livonia Partners will invest into a significant minority stake in Cgates to support growth of the company and further network and technology upgrades. The transaction is pending regulatory approval.  

    “In the growing Lithuanian market, Cgates as a leading player has proven its ability to grow organically and through acquisitions,” says Mindaugas Utkevičius, a founding partner at Livonia.  

    With nearly 300 employees and consolidated sales of €19.5 million in 2016, Cgates is Lithuania’s second-largest cable network operator. It provides cable and digital television, fixed telephony and fibre-optic broadband internet to more than 270,000 subscribers in 18 cities. The Vilnius-based company is currently owned by the founders of former Cgates’s parent Starman, which was bought out by Elisa Corporation of Finland earlier this year. 

    “The new investors support our strategy of becoming the product leader, strengthening our brand and the organisation, and seeking further consolidation opportunities. We aim to become the best in class platform to a wider audience and look forward to partnering with Livonia for their expertise in this sector,” says Cgates CEO Petras Kirdeika. 

    “This transaction successfully completes the series of steps we have taken over the course of the past two years to restructure our telecom operations in the Baltics,” says Indek Kuivallik, the Chairman of Polaris Invest. “Lithuanian market has vast potential and we are now uniquely positioned to make the most of it.”  

    The investment is the fourth for Livonia Partners Fund I, whose strategy is to invest in medium-sized companies in the Baltics that are well-managed and growing. Last year the fund acquired Ha Serv, an Estonia-based sauna manufacturer, and Hortes, Estonia’s leading home and gardening retail brand, and earlier this year Livonia invested in IT network and security firm Santa Monica Networks in Latvia and Lithuania. 

    “This is the fund’s second investment in telecoms and technology, an attractive sector for investments,” Utkevičius notes. His partners Rain Lõhmus and Kristīne Bērziņa formerly held roles with Starman and Lattelecom, respectively. Utkevičius also welcomed the participation of Ambient Sound Investments, the investment firm originated by the founders of Skype.  


    For further information:

    Mindaugas Utkevičius
    Partner, Livonia Partners

    +370 6207 1777
    mindaugas.utkevicius@livoniapartners.com


    Livonia Partners

    Livonia Partners is a private equity investment firm based in the Baltics, currently managing €83 million as part of the Livonia Partners Fund I and the Livonia Partners EIF Co-Investment Fund. Run by founders Kaido Veske, Kristīne Bērziņa, Rain Lõhmus, and Mindaugas Utkevičius, its investors are domestic and international financial institutions. Livonia was partly originated through the Baltic Innovation Fund (BIF), a common initiative of the Republic of Estonia, the Republic of Latvia, the Republic of Lithuania and the European Investment Fund.

    www.livoniapartners.com


    LHV Pension Funds Estoninia

    LHV Pension Funds Estonia are one of the largest Baltic pension fund managers with more than 170,000 clients and €1 billion assets under management. It is part of Estonia’s financial group LHV, whose shares trade on the Nasdaq Baltic market.  

    www.lhv.ee/en/pension/fund-management


    Ambient Sound Investments

    Ambient Sound Investments is an independent investment vehicle established in 2003 by the four founding engineers of Skype Technologies. The company now managers €100 million of its partners’ assets with a focus on technology-related firms. 

    http://www.asi.ee/

     

    Cgates

    Cgates is one of Lithuania’s largest cable entertainment and communication companies. Established in 1991, it now provides cable and digital television, fixed telephony and broadband internet to more than 270,000 customers in 18 cities.  

    http://www.cgates.lt


    Photo by Glenn Carstens-Peters on Unsplash


    €100 million BaltCap fund will invest into infrastructure of the Baltic States

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    BaltCap has launched BaltCap Infrastructure Fund (BIF) with the planned size of €100 million. The fund will invest into infrastructure development across Lithuania, Latvia, and Estonia.




    BaltCap, the largest private equity investor in the Baltic region, has launched BaltCap Infrastructure Fund (BIF) with the planned size of €100 million. The fund will invest into infrastructure development across Lithuania, Latvia, and Estonia.

    BaltCap Infrastructure Fund will primarily focus on providing development capital for transport, energy, and energy efficiency infrastructure projects in the Baltic States.

    “Infrastructure development is one of the key priority areas for the region to improve its competitiveness and independency. Baltic countries are facing infrastructure funding gap of €6 billion over the next 5 years which is expected to become even larger post 2014-2020 EU funding program. Physical infrastructure such as electricity, heating, railways, roads, ports and airports suffer from a substantial deficit in terms of capacities and efficiencies,” says BaltCap Infrastructure Fund partner Šarūnas Stepukonis.

    “With the strong support from international financial institutions and local pension funds we are able to address the infrastructure funding gap and help Lithuania, Latvia and Estonia to realise their infrastructure investments programs. It is the first time in the region when the local pension fund assets will be deployed to develop infrastructure for future generations,” added Stepukonis about the purpose to launch a new fund.

    The anchor investor of the fund is the European Investment Bank, which has commited to invest €20 million into the fund. This EIB support is guaranteed under the European Fund for Strategic Investments (EFSI), a central element of the Juncker’s Commission Investment Plan for Europe launched to overcome the current invetsment gap in the EU by mobilising private financing for strategic investments.

    Vice-President Ambroise Fayolle, whose responsibilities include EFSI, said, “Mobilising private financing for strategic investments is the main goal for EFSI and we welcome therefore the cooperation with the BaltCap Infrastructure Fund, as it is the first infrastructure fund in the Baltics with the goal to catalyse private investors to finance infrastructure projects. This Fund is an answer to the rising investment needs in transport, energy efficiency, and renewable energy sectors in the region. Particularly, it addresses the continuing and potentially growing demand for equity capital for the implementation of infrastructure projects. It thus encourages economic growth by promoting the competitiveness of the Baltic region and improving the business environment. What is equally important, the fund will create new jobs and by its focus on renewable energy and energy efficiency – significantly contribute to the climate change agenda.”

    European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said, "Investment in infrastructure in Europe is improving, but we still need to do more. This agreement to support the BaltCap Infrastructure Fund is a positive example of what we can do through the EFSI in order to mobilise such investments. I am particularly pleased that this agreement will support projects involving energy infrastructure, renewable energy and energy efficiency. By supporting investments in these sectors, we are helping to lay the foundation for future economic growth."

    “We are very honoured to be able to contribute to this important infrastructure fund which will benefit the economic and environmental development in all three Baltic states. From 1990, NEFCO has financed over 100 environmental projects in the region within the public and private sectors. This equity investment is, however, our first project in the Baltic States after re-entering that market recently, and we are especially pleased that the projects involve all three Baltic States: Estonia, Latvia and Lithuania,” says NEFCO’s Executive Vice President Kari Homanen.

    Other investors of the BaltCap Infrastructure Fund are Nordic Environment Finance Corporation, pension funds of SEB, Swedbank, and LHV, Swedbank Life Insurance, as well as other institutional investors. It is the largest combined local pension funds commitment to the Baltics focused private equity fund to date.

    BaltCap Infrastructure Fund investment strategy is based on the highest environmental, social and governance standards and climate change mitigation criteria. The fund has a duration of 20 years.

    This is a second fund launched by BaltCap this year. Recently BaltCap Growth Fund with the target size of €50 million was established to provide growth capital across the Baltic region for small and medium-sized (SME) companies.

    For more information:

    Šarūnas Stepukonis
    BaltCap Infrastructure Fund partner
    sarunas.stepukonis@baltcap.com
    Phone: +370 6866 6201
    www.baltcap.com

    Alicja Chytla
    EIB Press officer
    a.chytla@eib.org
    Phone: +352 43 79 88233 / Mobile: +352 621 45 92 61
    Follow us on Twitter @eib


    Background information:


    The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.

    The Investment Plan for Europe focuses on strengthening European investments to create jobs and growth.
    It does so by making smarter use of new and existing financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects. On 14 September 2016, the Commission proposed extending EFSI by increasing its firepower and duration as well as reinforcing its strengths.

    Photo by Tulen Travel on Unsplash



    Investment activity of ESTVCA members surged 385% in 2016

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    In 2016 EstVCA members invested €74m compared to €19,2m in 2015. 385% growth in investments is driven by Baltic Innovation Fund. BIF funds have raised €325m with €132m coming from local pension funds. EstVCA member AUM is €636m. There are 93 active portfolio companies with total number of employees reaching 12 383 people and combined turnover is €1,3bn.



    ESTVCA has published Estonian Private Equity & Venture Capital Review 2016.

    2016 market highlights:

    • Market welcomes new player - Karma Ventures with its €40m early stage fund
    • Government signs €100m fund of funds called EstFund
    • Government approves the proposals of ESTVCA to ease the taxation on employee stock options
    • ESTVCA hosts high-level Baltic VC Summit with more than 200 participants in Pärnu
    • Baltic Venture Capital Market unites under single flag - ESTVCA, LVCA and LT VCA sign the agreement to establish Pan-Baltic VCA
    • Reorganisation of SmartCap
    • In co-operation with ESTVCA, government designs new Limited Partnership fund regime which was enacted with the New Investment Fund Act in December


    2016 in numbers:

    • Investment activity surged 385% to %74m
    • 35 investments of which 16 were new and 19 follow-on
    • €49m was invested to companies registered in Estonia
    • PE/VC AUM reached €636m
    • 93 active portfolio companies
    • 12 383 employees in portfolio companies
    • combined turnover €1,3bn


    Download PDF

    Photo by Tasi Zoltán on Unsplash

    Baltic M&A and Private Equity Forum 2017 will be held on 4-5 October in Vilnius

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    One of the most important and prestigious M&A and Private Equity events in the Baltics is taking place in Vilnius at Radisson Blu Hotel Lietuva on 4-5 October.



    Since its launch in 2010, the Baltic M&A and Private Equity Forum has developed an excellent reputation among private equity and venture capital funds, investment bankers, lawyers, other advisers, company managers and shareholders, gathering 200+ participants each year. The Forum offers a platform for establishing new contacts, finding new business opportunities, sharing experience, and spending time with peers.

    Forum will focus on the following key topics:

    • Baltic economies and transaction market: bound to grow?
    • Consolidation trends and practice: will the pace intensify?
    • Private equity & venture capital: hunting season continues – and what about exits?
    • M&A as a strategic tool: how to use it properly?
    • Case studies from recent transactions in the Baltics

    In addition, the Forum will also feature the Baltic M&A and Private Equity Awards and multiple networking opportunities.

    Confirmed speakers:

    Tomasz Czechowicz, Managing Partner, Founder at MCI Capital (Poland),
    Normunds Stanevics, CFO at Food Union Europe, Chairman of the Board of Rīgaspienakombināts (Latvia),
    Sebastian Król, Partner of Enterprise Investors (Poland),
    William Wells, Managing Director at Rothschild (UK),
    Tamas Szalai, CEE Equity Advisor Investment Director, regional private equity investor (Hungary),
    Klaus Konrad, Founder and Co-CEO of BrainCode, former investment director of Intel Capital (Germany),
    Bjorn Tremmerie, Head of Venture Capital and Impact Investing at EIF (Luxembourg),
    Jonas Butautis, Chairman of the Management Board of Magnetic MRO (Estonia),
    Nikita Sergienko, CEO at Bitė Group (Lithuania),
    Kaia Kivistik, Head of Finance at Olympic Entertainment Group (Estonia),
    Gediminas Kvietkauskas, CEO at East West Agro (Lithuania),
    Vytautas Plunksnis, Head of Private Equity at INVL Asset Management (Lithuania),
    Šarūnas Keserauskas, Chairman of the Competition Council of the Republic of Lithuania (Lithuania),
    Andres Agasild, CEO and Co-Founder of Markit (Estonia),
    Daivis Švirinas, Head of the Sorainen Competition and Regulatory Team in Lithuania (Lithuania),
    Magnus Toftgård, Senior Associate at JLT Risk Solutions (Sweden) and others.


    Registration:


    EstVCA members get a special rate. Please follow this link to register.


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