BaltCap Fund II reaches first close

BPEF II, which is the first fund launched under the Baltic Innovation Fund initiative, has a target of €100m. The fund is understood to have been launched around a year ago.

The Baltic Innovation Fund is a fund-of-funds initiative between the European Investment Fund (EIF) and the governments of Estonia, Latvia and Lithuania acting through their respective national agencies KredEx, LGA and Invega. It aims to widen the financing possibilities for Baltic companies and to develop the private equity and venture capital market in the CEE region.

BaltCap's previous vehicle also targeted €100m, though it held a final close on €63m in December 2009 after more than two years on the road, according to unquote" data. The fund received commitments from Erste Group Bank and SEB Asset Management.

BaltCap Private Equity Fund I has so far completed eight investments that acrrued an aggregate turnover of €230m in 2013. According to BaltCap, the portfolio companies have more than doubled their revenues and quadrupled EBITDAs during the last four years.

Investors
Investors include EIF, in partnership with Baltic Innovation Fund; the European Bank for Reconstruction & Development (EBRD); and Baltic pension funds managed by Swedbank Investment Funds, LHV Asset Management and Danske Capital.

Swedbank's pension funds are committing €12m in total. The Swedish LP has invested in three of BaltCap's previous vehicles.

Investments
BPEF II will seek to acquire controlling stakes in companies in the Baltics with enterprise values of between €5-40m, focusing on buy-and-build strategies, and will also consider larger transactions alongside co-investors.

The fund will typically invest between €5-10m per equity transaction. BPEF II will continue the strategy employed by BaltCap Private Equity Fund I.

People
Peeter Saks is the managing partner of BaltCap. Richard Pelly is the chief executive of EIF. Suma Chakrabarti is the president of EBRD. Andrus Treier is the CEO of KredEx. Kristjan Tamla is the CEO of Swedbank Investment Funds.

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