OREANDA-NEWS. December 13, 2007. The EBRD is investing up to EUR 20 million into the BaltCap Private Equity Fund to support the growth and development of medium sized enterprises in the Baltic States Estonia, Latvia and Lithuania, reported the press-centre of EBRD.

The Fund will concentrate on equity investments from EUR 2 to EUR 15 million in innovative local companies in the Baltics which are active in rapidly growing sectors or in promising new areas.

Many local enterprises have benefited from EU enlargement and the favourable economic climate in neighbouring countries. The inflow of new equity is crucial to making this dynamic development sustainable. The EBRD plays a key role by acting as a catalyst for other potential investors.

The targeted size of the Fund is EUR 70 million with a maximum set at EUR 100 million and a first round of funding of EUR 57 million. The Bank will commit an initial minimum EUR 15 million which will help the Fund to achieve its minimum size. Further EBRD commitments will be made following an overall increase of the volume of the fund. The EBRD aims to keep its share at 20 percent.

The EBRD has been investing in the Baltic States since its foundation in 1991, investing ?1.26 billion of its own funds and mobilising another ?2.44 billion from its partners. The Bank is proud to be associated with the successful changes which allowed for their EU membership in 2004. In line with these developments the Bank decided to focus its activities in the Baltic States on activities such as providing risk capital.

Peter Reiniger, EBRD Business Group Director, said the Bank’s investment would help to develop the private equity industry in the Baltics and also equity financing to local small and medium-sized enterprises. “These companies have enormous potential which we will help to realise”, he added.

Peeter Saks, Managing Partner of BaltCap, said the EBRD role has been instrumental in developing the private equity industry in the region. “We are proud to continue the cooperation with the EBRD whose strategic focus and long term commitment fits well with our vision of being the leading private equity investor in fast growing entrepreneurial businesses in the Baltics”.

The EBRD has in the past worked closely with the management team of BaltCap in three prior investment funds: Baltic Investment Fund I and II (1995), Baltic Investment Fund III (1999) and Baltic SME Fund (2001). The EBRD will have the right to nominate one member of the advisory board of BaltCap.