Lithuanian Aid Fund for Business looks to raise up to €500m

Vilcinskas is the CEO of the Lithuanian State Investment Management Agency (Viva), which manages the fund. It is not using any advisers for the fundraising, but would involve them in later stages if needed, he added.

The fund has already secured a €100m investment from the government, and foresees raising up to €400m via state-guaranteed bonds in several tranches when needed, depending on its own target pipeline, added Vilcinskas. If it sees interest from external investors, it may opt to postpone the bond issuance and raise capital from external investors initially instead, Vilcinskas said.

The manager is in early-stage talks with foreign institutional investors for the fundraise. It also plans to target local pension funds, Vilcinskas said. It has no specific time frame to raise the additional capital; however, its investment period is expected to end on 30 September 2021, he said.

The fund's hurdle rate would be based on the euro high-yield bond index (ICE BofA BB Euro High Yield Index) at the time of an investor's entry into the fund, Vilcinskas said. Moreover, the state will use the already invested €100m for the first-loss protection mechanism, Vilcinskas added.

Launched in early October, the fund plans to invest a total of up to €1bn in domestic medium and large enterprises affected by Covid-19, according to its website.

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