Building an equity ecosystem in the Baltics: an evolution

Our role as a multilateral development institution means that we help put public resources to work in a smart way, and most importantly in a way which helps to attract private investors.

Private investors are crucial to the independence and sustainability of an ecosystem, therefore our role evolves over time.

An evolution of equity financing in the Baltic ecosystem

as an ecosystem develops, it will move through three phases:

Typically > 50% public funding

Characterised by:

  1. First time teams
  2. Early stage VC
  3. Moderate/low participation of local private investors
  4. Education of entrepreneurs required
  5. Stimulation of local BA networks

EU Structural Funds

Typically < 50% public funding

Characterised by:

  1. More experienced investment teams
  2. Balanced with private capital
  3. Later stage investments
  4. State and IFIs provide signaling effect
  5. Private investors drawn in by market opportunities

BIF I

Typically < 30% public funding

Characterised by:

  1. Well established teams
  2. Private dominates public
  3. Lower mid-market investment strategy
  4. Public capital as a anchor investment to ensure “critical mass”
  5. Attractive alternative asset class for private investors

BIF II

The EIF's 20 years of experience in the Baltic market

2000

First Equity Investment into a Baltic SME

2008

JEREMIE initiatives

Early stage programmes with EU structural funds in Latvia and Lithuania

2012

Launch of BIF I

First EIF managed fund-of-funds with €100m dedicated to Baltic PE/VC investments

2015

Top-up to BIF I

Fund increase of €30m allowing for additional fund investments

2018

End of BIF I

Investment Period Successful investments into 7 PE/VC funds

2019

Launch of BIF II

Second generation fund-of-funds dedicated to Baltic PE/VC investments as a continuation from BIF I with €156m