The European Investment Fund (EIF) has pledged its support to the SG Capital baltic Private Credit Fund, a groundbreaking initiative designed to bolster small and medium-sized enterprises (SMEs) and mid-cap companies across Estonia, Latvia, and Lithuania. This strategic move aims to address the persistent funding challenges faced by businesses in the Baltic region, enabling them to thrive in a competitive economic landscape.
“This initiative is pivotal in providing essential financing to small companies in the Baltics, fostering economic growth and innovation,” said EIF Chief Executive Marjut Falkstedt. “Our investment not only bridges a critical funding gap but also signals our confidence in the region’s potential and the capabilities of SG Capital.”
Managed by a specialized team within SG Capital, the Baltic Private Credit Fund seeks to raise €100 million from a diverse group of institutional investors. The fund will focus on providing senior financing to SMEs and small mid-cap companies, particularly in Latvia and Lithuania, where access to traditional bank lending remains limited. This innovative approach aims to empower businesses to pursue growth opportunities that might or else be out of reach.
In alignment wiht the Sustainable Finance Disclosure Regulation (SFDR),the fund has been classified as an Article 8 fund,underscoring its commitment to environmental sustainability.notably, 15% of its investments will be directed toward projects that meet stringent climate action and environmental sustainability criteria. This dual focus on financial support and ecological obligation reflects a forward-thinking strategy that benefits both businesses and the planet.
The fund is expected to reach its first closing by April 2025, marking a notable milestone in its mission to transform the Baltic buisness landscape. Harijs Švarcs, Founding Partner at SG Capital Partners AIFP, emphasized the importance of this initiative, stating, “Building on the commitment by EIF, by introducing private credit that is a well-known and increasingly popular financing alternative in Europe and the US, we expand our financing solutions to empower Baltic businesses to pursue sustainable and profitable growth.”
With €200 million in gross assets under management across two strategies, SG Capital has a proven track record of supporting institutional investors over the past decade. This experience positions the firm as a trusted partner in driving economic development and innovation in the baltics.
As part of the European Investment Bank Group, the EIF plays a crucial role in facilitating access to finance for SMEs across Europe. by partnering with SG Capital, the EIF is reinforcing its commitment to fostering economic resilience and growth in the Baltic region, ensuring that businesses have the resources they need to succeed in an ever-evolving global market.
How does the SG Capital Baltic Private Credit Fund address the specific financing challenges faced by SMEs and mid-cap companies in the Baltic region?
Table of Contents
- 1. How does the SG Capital Baltic Private Credit Fund address the specific financing challenges faced by SMEs and mid-cap companies in the Baltic region?
- 2. Empowering Baltic SMEs: A Conversation with SG Capital’s Investment Strategist
- 3. Introduction
- 4. Q: Anna, could you tell us more about the SG Capital baltic Private Credit Fund and its mission?
- 5. Q: How does this fund align with the broader goals of the European Investment Fund (EIF)?
- 6. Q: The fund has been classified as an Article 8 fund under the Sustainable Finance Disclosure Regulation (SFDR). What does this mean for potential investors and the businesses you support?
- 7. Q: What are the expected milestones for the fund,and how do you see it transforming the Baltic business landscape?
- 8. Q: what message would you like to convey to businesses in the Baltic region considering this financing option?
- 9. Thought-Provoking question for Readers
Empowering Baltic SMEs: A Conversation with SG Capital’s Investment Strategist
Introduction
In a meaningful move to bolster economic growth in the Baltic region, the European Investment Fund (EIF) has pledged €20 million to the SG Capital Baltic Private Credit Fund. This initiative aims to support small and medium-sized enterprises (SMEs) and mid-cap companies across Estonia, Latvia, and Lithuania. To delve deeper into this groundbreaking development, we sat down with Anna Koval, Investment Strategist at SG Capital Partners AIFP, to discuss the fund’s objectives, its impact on the Baltic business landscape, and its alignment with sustainability goals.
Q: Anna, could you tell us more about the SG Capital baltic Private Credit Fund and its mission?
Anna Koval: Absolutely. the SG Capital Baltic Private Credit Fund is a €100 million initiative designed to address the persistent funding challenges faced by SMEs and mid-cap companies in the Baltic region. Our primary focus is on providing senior financing to businesses in Estonia, Latvia, and Lithuania, particularly in areas where access to customary bank lending is limited. By offering this choice financing solution,we aim to empower these businesses to pursue growth opportunities that might otherwise be out of reach.
Q: How does this fund align with the broader goals of the European Investment Fund (EIF)?
Anna Koval: The EIF has been a crucial partner in this endeavor. Their €20 million commitment not only bridges a critical funding gap but also signals their confidence in the region’s potential. The EIF’s mission is to facilitate access to finance for SMEs across Europe, and this fund is a testament to that commitment. By partnering with SG Capital, the EIF is reinforcing its dedication to fostering economic resilience and growth in the baltic region.
Q: The fund has been classified as an Article 8 fund under the Sustainable Finance Disclosure Regulation (SFDR). What does this mean for potential investors and the businesses you support?
Anna Koval: Being classified as an Article 8 fund underscores our commitment to environmental sustainability.Notably, 15% of our investments will be directed toward projects that meet stringent climate action and environmental sustainability criteria. This dual focus on financial support and ecological duty reflects a forward-thinking strategy that benefits both businesses and the planet. For investors, this means they can align their portfolios with sustainability goals while supporting economic growth in the Baltics.
Q: What are the expected milestones for the fund,and how do you see it transforming the Baltic business landscape?
Anna Koval: We expect to reach our first closing by April 2025,which will be a significant milestone in our mission to transform the Baltic business landscape. By introducing private credit—a well-known and increasingly popular financing alternative in Europe and the US—we are expanding our financing solutions to empower Baltic businesses to pursue sustainable and profitable growth.With €200 million in gross assets under management across two strategies, SG Capital has a proven track record of supporting institutional investors, and we are confident in our ability to drive economic development and innovation in the Baltics.
Q: what message would you like to convey to businesses in the Baltic region considering this financing option?
Anna Koval: My message is simple: take advantage of this opportunity. The SG capital Baltic Private Credit Fund is here to provide the financial support you need to thrive in a competitive economic landscape. Whether you’re looking to expand, innovate, or simply stabilize your operations, we are committed to helping you achieve your goals. Together, we can build a more resilient and sustainable future for the Baltic region.
Thought-Provoking question for Readers
What role do you think alternative financing solutions like private credit will play in the future of small and medium-sized enterprises? Share your thoughts in the comments below!
