The Baltic Innovation Fund signed an agreement with the European Investment Fund (EIF) and the three Baltic states on August 6, according to a press release, bringing an estimated €300m to regional SMEs.
Over the next five years, the €156m Baltic Innovation Fund 2 will be used to invest in private equity and venture capital funds that focus on the Baltic states.
Three national promotional institutions – KredEx (Estonia), Altum (Latvia) and Invega (Lithuania) – will each commit €26m, with the EIF contributing a further €78m. In addition, the selected fund managers will have to bring in financing from private investors, which would bring the total amount available for investments into the Baltic companies to over €300m.
Pier Luigi Gilibert, Chief Executive of the European Investment Fund, said that “the Baltic Innovation Fund is a perfect example of how the cooperation between the three Baltic states can bring powerful impact on the Baltic equity market”.
“Via the BIF initiative, more than EUR 435m has been fundraised for investment in local companies, and we are proud that this capital has attracted local pension funds to participate more actively in the local ecosystem.”
Lehar Kütt, Chief Executive of KredEx, said “the first Baltic Innovation Fund is an excellent illustration of the three Baltic states acting together and making small capital markets more attractive for investors and creating further financing possibilities for enterprises”.
“In the Baltics, equity investments to GDP are still significantly lagging behind the European average,” said Juris Vaskāns, Member of the Board at Altum. “Therefore, we see a big potential increase in BIF2 capital inflows that will amount to up to €100 million in Latvia alone”.
“It is very important to ensure access to private equity for local companies in all stages of their development, as well as to attract larger market players and institutional investors to invest in the Baltic States,” said Kęstutis Motiejūnas, Chief Executive of Invega. “The Baltic Innovation Fund had the power to achieve all of this.”
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).