The leading asset management group in the Baltics, Invalda INVL, through its subsidiary company INVL Asset Management, has established a new closed-end investment fund for informed investors INVL Private Equity Fund II which is the successor of the private equity fund INVL Baltic Sea Growth Fund. INVL Private Equity Fund II will invest in businesses in the Baltic States, Poland and neighbouring countries. It targets EUR 250 million of capital with a hard cap of EUR 400 million which will make it the largest fund in the Baltics.
INVL Private Equity Fund II starts its operations after the Fund rules were approved by the Bank of Lithuania.
“We believe that INVL Private Equity Fund II will be the top choice for local and foreign investors who understand our region, the opportunities it presents and are willing to invest in companies operating in the market with sound plans for rapid growth. The capital of the fund and the knowledge of the investment managers will be an additional resource, stimulating the development of the companies and the countries in which investments are made.
Invalda INVL team has accumulated over 30 years of experience in acquiring, restructuring, and growing market leaders in the region. It is confirmed by the successful operations of the existing INVL Baltic Sea Growth Fund, including specific portfolio companies leading in their respective fields. The new fund will be managed by the same team that has demonstrated the ability to invest, execute complex transactions, and manage companies to ensure their rapid expansion and value growth,” said Darius Šulnis, CEO of Invalda INVL.
“The new fund will continue the successful strategy of EUR 165 million INVL Baltic Sea Growth Fund, which invested in and significantly developed businesses in sectors such as waste management combating climate change, healthcare and food processing companies contributing to public welfare, namely Eco Baltia, InMedica, Eglės sanatorija or Galinta, which are leaders in their respective fields.
“The net internal rate of return of the INVL Baltic Sea Growth Fund at the end of 2023 was 26%, with a money multiple of 1.9x. Had the Fund investors allocated capital to investments in the stock indices ‘OMX Baltic All Share’ and ‘MSCI Eastern Europe ex RU’ simultaneously, the return would have been respectively 20 and 17 percentage points lower,” said Deimantė Korsakaitė, Managing Partner of INVL Private Equity Fund II and INVL Baltic Sea Growth Fund.
According to her, the public market equivalent is a tool to compare investments in private equity and listed companies.
The new fund will continue the strategy of INVL Baltic Sea Growth Fund – to capitalise on attractive opportunities in the Baltics and Poland by investing in medium-sized companies that, with additional capital injection, have the potential to become their sectors’ leaders in the region, thus ensuring an attractive risk-adjusted returns for investors. INVL Private Equity Fund II will focus on acquiring controlling or significant minority stakes and actively participate in investment management to significantly increase the value of capital over the long term. The aim is to form a diversified portfolio of 10-12 investments, providing target companies with growth capital, as well as carrying out buyout and buy-and-build’ investments. The Fund plans to invest EUR 15 million to EUR 35 million in each portfolio investment, but if significant potential for value enhancement through additional investments is foreseen it may also carry out smaller initial capital investments.
“We will continue to adhere to strict investment discipline and invest only in companies where we can see clear potential for value creation, and how our involvement with management would help ensure faster business growth and expansion,” says the INVL Private Equity Fund II and INVL Baltic Sea Growth Fund Managing Partner.
The initial offering of investment units for INVL Private Equity Fund II is expected to be completed after raising at least EUR 125 million, with the aim to announce it by the end of this year. The minimum investment in the fund is EUR 10 million, however the management company has the right to accept investors with a lower investment amount. Additionally, the management company is establishing a feeder fund that will invest in INVL Private Equity Fund II, with a minimum investment amount of EUR 125 thousand.
To align the interests of investors and the INVL Private Equity Fund II management team, the latter will invest a significant amount, constituting at least 10% of the total size of the fund. It is planned that the fund will operate for 10 years from the end of the initial offering stage.
Established by the leading alternative asset manager in the Baltics, INVL Asset Management, the new fund adheres to the highest standards of corporate governance and risk management, overseen by the Bank of Lithuania. The assets of INVL Private Equity Fund II are safeguarded, and the movement of funds is supervised and controlled by a depository. The Bank of Lithuania granted INVL Asset Management the license to carry out activities under the Law on Alternative Investment Fund Managers in October 2017.
About INVL Asset Management
INVL Asset Management is the leading Baltic alternative asset manager. We strive to deliver superior risk-adjusted returns to our investors while positively impacting our region’s economic development.
We are part of the Invalda INVL group with a track record spanning over 30 years. Our group manages more than EUR 1 billion of assets across multiple asset classes including private equity, forests and agricultural land, renewable energy, real estate as well as private debt. Our scope of activities also includes family office services in Lithuania and Latvia, management of pension funds in Latvia, and investments in global third-party funds. Further information www.invl.com/en/.
Important notice
This is a marketing communication of an information nature, which is not and shall not be construed as an offer to purchase investment units of a collective investment undertaking, an investment recommendation, or investment research, as it is not designed to take into account the investment objectives, financial situation, or needs any individual investor.
When investing, the investors assume the risk associated with the investment. The value of investments can both rise and fall, and an investor may recover less than he/she/it has invested. Past investment results do not guarantee the same results or profitability in the future. Past performance is not a reliable indicator of future performance. Before making a decision to invest, potential investors should, on their own or with the help of investment advisers, assess the suitability of the investment for them along with the taxes and fees related to the investment, consider all the risks related to the investment, and carefully read the rules, prospectus and other documents of the respective collective investment undertaking.
Units of this collective investment undertaking, mentioned in this release may only be distributed to informed investors as defined in the Law on Collective Investment Undertakings for Informed Investors of the Republic of Lithuania, as amended and supplemented from time to time, and may not be distributed and transferred to any other clients who do not meet the criteria of an informed investor.
